What ryano refers to is the diaeresis, from the Greek for `to divide'; or, in French, trema. The use of the diaeresis in English is disappearing, especially in America (how often do you see the word `coöperate' anymore?). It is still common in French, Dutch, and other more phonetic languages. (Yes, I am calling French `phonetic'. Deal.)

`Umlaut' (see the Webster 1913 definition below) refers to the sound change the symbol represents. Umlaut as it occurs in Germanic langauges generally causes a back vowel to become fronter, and often higher.

See also ablaut, a different kind of vowel shift that is less patently Germanic (but is still patently Indo-European).