Basically, *any* lubricated gearbox (transmission, differential, whatever) needs some kind of venting. When the temperature rises, everything inside expands (including the air). It has to go somewhere (or the pressure would start forcing lubricant past the seals). The key is to make sure that when it cools back down, the air comes from someplace clean and dry.
I first learned about this issue with my old 4x4 Isuzu Trooper. I was surprised to find the front differential vent right up near the hood (about 3' of tubing). But if you've been slogging through mud, you want to make sure the air that gets back to the differential when it cools down doesn't bring water and mud/sand with it.
Often the vent is just a tube held out of the way; some (like my Trooper) have a little baffle/filter on the end of the tube. Most cars have vents built into the casting, somewhere near the top of the case; you probably wouldn't notice it unless you were looking for it.
Make sure you vent tube is held someplace where it can't get dirt or water into it.
