For HTML 4, the answer is technically:
ID and NAME tokens must begin with a letter ([A-Za-z]) and may be followed by any number of letters, digits ([0-9]), hyphens ("-"), underscores ("_"), colons (":"), and periods (".").
HTML 5 is even more permissive, saying only that an id must contain at least one character and may not contain any space characters.
The id attribute is case sensitive in XHTML.
As a purely practical matter, you may want to avoid certain characters. Periods, colons and '#' have special meaning in CSS selectors, so you will have to escape those characters using a backslash in CSS or a double backslash in a selector string passed to jQuery. Think about how often you will have to escape a character in your stylesheets or code before you go crazy with periods and colons in ids.
For example, the HTML declaration <div id="first.name"></div> is valid. You can select that element in CSS as #first\.name and in jQuery like so: $('#first\\.name'). But if you forget the backslash, $('#first.name'), you will have a perfectly valid selector looking for an element with id first and also having class name. This is a bug that is easy to overlook. You might be happier in the long run choosing the id first-name (a hyphen rather than a period), instead.
You can simplify your development tasks by strictly sticking to a naming convention. For example, if you limit yourself entirely to lower-case characters and always separate words with either hyphens or underscores (but not both, pick one and never use the other), then you have an easy-to-remember pattern. You will never wonder "was it firstName or FirstName?" because you will always know that you should type first_name. Prefer camel case? Then limit yourself to that, no hyphens or underscores, and always, consistently use either upper-case or lower-case for the first character, don't mix them.
A now very obscure problem was that at least one browser, Netscape 6, incorrectly treated id attribute values as case-sensitive. That meant that if you had typed id="firstName" in your HTML (lower-case 'f') and #FirstName { color: red } in your CSS (upper-case 'F'), that buggy browser would have failed to set the element's color to red. At the time of this edit, April 2015, I hope you aren't being asked to support Netscape 6. Consider this a historical footnote.
Unicode arrows heads:
- ▲ - U+25B2 BLACK UP-POINTING TRIANGLE
- ▼ - U+25BC BLACK DOWN-POINTING TRIANGLE
- ▴ - U+25B4 SMALL BLACK UP-POINTING TRIANGLE
- ▾ - U+25BE SMALL BLACK DOWN-POINTING TRIANGLE
For ▲ and ▼ use ▲ and ▼ respectively if you cannot include Unicode characters directly (use UTF-8!).
Note that the font support for the smaller versions is not as good. Better to use the large versions in smaller font.
More Unicode arrows are at:
Lastly, these arrows are not ASCII, including ↑ and ↓: they are Unicode.
Best Solution
There's another nice trick you can use to significantly improve the look of a rendered HTML diff. Although this doesn't fully solve the initial problem, it will make a significant difference in the appearance of your rendered HTML diffs.
Side-by-side rendered HTML will make it very difficult for your diff to line up vertically. Vertical alignment is crucial for comparing side-by-side diffs. In order to improve the vertical alignment of a side-by-side diff, you can insert invisible HTML elements in each version of the diff at "checkpoints" where the diff should be vertically aligned. Then you can use a bit of client-side JavaScript to add vertical spacing around checkpoint until the sides line up vertically.
Explained in a little more detail:
If you want to use this technique, run your diff algorithm and insert a bunch of
visibility:hidden<span>s or tiny<div>s wherever your side-by-side versions should match up, according to the diff. Then run JavaScript that finds each checkpoint (and its side-by-side neighbor) and adds vertical spacing to the checkpoint that is higher-up (shallower) on the page. Now your rendered HTML diff will be vertically aligned up to that checkpoint, and you can continue repairing vertical alignment down the rest of your side-by-side page.