Microsoft HTML Help (CHM file format) is a set of technologies for delivering help and Web content using Hypertext Markup Language (HTML). HTML Help is designed for authors or developers who create content for software programs, multimedia titles, intranets, extranets, or for the Internet. HTML Help provides navigational controls that enable users to easily find and sort information. HTML Help also provides a set of tools that assist authors in creating and organizing content delivered with thenavigational controls.
In fact chm files are compiled HTML files. Each chm file contains one or more html pages ompiled in the form of a single compressed file.
Chm files are Win98 and 2000 native help files. Therefore if you double-click on them in Windows explorer they will be automatically opened by windows. Since these are comiled help files they can be opened only in windows and not on web servers. you need to put html files for web access.
You will also find the notes at the following link useful.
http://www.helpware.net/htmlhelp/linktochm.htm#