this question came up in a seminar I attended by Google this week. A URL with hypens is easier for the spider to read if the URL has more than one word. Google recommends hypenated URLs. Google did warn not to stuff the hypenated URL with spam keywords. Five or fewer words should not present a problem unless your words are unrelated to each other and/or to the site and obvious spam.
My opinion is that you have to weigh this with the difficulty hypens present for users to remember and for domain resale because hypened domains have a lower market value.
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