As jets began flying with U.S. airlines in the late 1950s and early 1960s, the FAA rule in effect at the time mandated that if the difference between an aircraft's maximum structural takeoff weight and its maximum structural landing weight was greater than 105%, the aircraft had to have a fuel dump system installed. Accordingly, aircraft such as the Boeing 707 and 727 and the Douglas DC-8 had fuel dump systems. Any of those aircraft needing to return to a takeoff airport above the maximum structural landing weight would simply jettison an amount of fuel sufficient to reduce the aircraft's total weight to below that maximum structural landing weight limit, and then land.
During the 1960s, Boeing introduced the 737, and Douglas the DC-9, the original models of each being for shorter routes; the 105% figure was not an issue, thus they had no fuel dump systems installed. During the 1960s and 1970s, both Boeing and Douglas "grew" their respective aircraft as far as operational capabilities were concerned via Pratt & Whitney's development of increasingly powerful variants of the JT8D engines that powered both aircraft series. Both aircraft were now capable of longer duration flights, with increased weight limits, and complying with the existing 105% rule became problematic due to the costs associated with adding a fuel dump system to aircraft in production. Considering the more powerful engines that had been developed, the FAA changed the rules to delete the 105% requirement, and FAR 25.1001 was enacted stating a jettison system was not required if the climb requirements of FAR 25.119 (Landing Climb) and FAR 25.121 (Approach Climb) could be met, assuming a 15-minute flight. In other words, for a go-around with full landing flaps and all engines operating, and at approach flap setting and one engine inoperative, respectively.
Since most twinjet airliners can meet these requirements, most aircraft of this type such as the Boeing 737 (all models), the DC-9/MD80 and Boeing 717, the A320 family and various regional jet ("RJ") aircraft do not have fuel dump systems installed. In the event of an emergency requiring a return to the departure airport, the aircraft circles nearby in order to consume fuel to get down to within the maximum structural landing weight limit, or if the situation demands it, simply lands overweight without delay. Modern aircraft are designed for possible overweight landings in mind, but this is not done except in cases of emergency, and various maintenance inspections are required afterwards. Many movies and TV news stories mistakenly assume that all aircraft can dump fuel, when in fact most cannot. In certain atmospheric conditions where the moisture content of the air is high, 737s (and other aircraft) flying at low altitudes sometimes leave a moisture trail that can come off the top of the wing, wingtips, or trailing edge flaps. Moisture trails coming off the trailing edge flaps can appear especially odd, since the moisture is being "spun" by aerodynamic forces. It's quite possible that some people observe these moisture trails and may think this is fuel being dumped, but it's just water vapor, and not fuel.
Longer-range twin jets such as the Boeing 767 and 777 and the Airbus A300, A310, and A330 may or may not have fuel dump systems, depending upon how the aircraft was ordered, since on some aircraft they are a customer option. Three- and four-engine jets like the Lockheed L-1011, McDonnell Douglas DC-10/MD-11, Boeing 747 and Airbus A340 usually have difficulty meeting the requirements of FAR 25.119 near maximum structural takeoff weight, so most of those have jettison systems. A Boeing 757 has no fuel dump capability as its maximum landing weight is similar to the maximum take-off weight.
http://en.wikipedia.org/wiki/Fuel_dumping