[Editor's note: this submitted article dates from December 2010, but has not been mentioned before]
Here's an article on the inner-workings of geocoders in Dr. Dobbs magazine.
From the address standardization section of the article: "To get a reasonable coverage of possible address spelling rules, we will need to come up with approximately two hundred of them, each with a list of exceptions. Please note that rules dealing with abbreviations will have to go both ways — when to abbreviate and when not to abbreviate (for example, "Asbury Prk" should not be abbreviated, but spelled out as "Asbury Park"). The rules will need to deal with proper use of street types; street pre-directions and post-directions, such as "123 N 45th E"; formats for secondary designators, such as apartment and suite numbers; numeric, alpha-numeric and fractional house numbers, and on and on."
[Update: fixed link to article]
Re: An Introduction to Geocoding
howa bout linking to the actual article?