Soot defines itself. The reason it's included here is because it's sometimes and under certain conditions found in the combustion chambers and flues of water heaters -- and it's a bad sign.

If you didn't know that, you might not recognize it when you saw it -- or worry. One telltale is black stuff on the cover of a tank around the draft diverter, right. Another is a blackened combustion chamber, as above.

The reason to worry is that soot means a fouled combustion chamber and flues. Gas is not being completely burned. It's a downward spiral that can result in flames billowing out of the bottom of the tank, potentially setting anything nearby on fire.