Most dive hoods are made out of neoprene, which is a very spongy material. The reason neoprene is such a popular dive attire material is because is it made of countless air bubbles, which trap the heat produced by the diver's body. The trapped heat, in turn, heats the water that is trapped between the diver's head and the neoprene. The neoprene traps the diver's natural heat and keeps the heat from transferring to the open water.
If you dive in cold water, a thick neoprene hood that covers your head and neck will be the most practical. The thicker the neoprene, the warmer you head will be. For example, 3mm hood won't keep you as warm as a 7mm hood. Cold water dive hoods typically have a sizable bib, which can be tucked into the wetsuit at the neck opening. The bib reduces the transfer of water and keeps the diver that much warmer. Cold-water hoods cover some or all of the diver's forehead and jaw/chin areas, as well as a considerable amount of the diver's cheeks. Very little of the diver's face is exposed to the cold water with this style of mask.
Warm-water dive hoods are much thinner than cold-water hoods and typically do not offer the large bib that cold-water hoods provide. Warm-water hoods are made from thin neoprene (3mm, for example) or nylon. The nylon option does not insulate as well as the neoprene option, but it is much less cumbersome. Warm water hoods also tend to cover less of the diver's face; some warm-water hoods do not cover any of the chin and very little of the jaw.
A dive hood should offer a snug fit; if a hood is too loose, water will be able to freely flow in and out of the hood. That continual transfer of water will not allow your head to heat the water and keep it trapped. If the hood creates discomfort along the face or neck/throat, it is too small. If water freely flows in and out of the hood, it is too big.
To ease the practice of donning and ditching your dive hood, some manufacturers include zippers along the back of the hood. This option is very pleasing to many divers, and is especially popular among those who have long hair.
Because neoprene is very porous, it can also absorb and trap smells. Keep your hood smelling fresh by bathing it with neoprene shampoo. Simply rinsing your hood with fresh water will reduce the amount of residue but won't remove odors.
The last thing you want to do is find out on the beach or dive boat that something is wrong with your gear, and not have a way to fix the problem. By carrying a save-a-dive kit, you can still safely enjoy your dive or snorkeling adventure just like you planned.