They generally come in as hitchhikers on liverock... They appear to act like filter feeders, so a lot of food in the water = a lot of hydroids...
And, if anyone ever figures out a good, reef safe way of eradicating 'em, PLEASE lemme know! Before I knew better I thought they were feather dusters and used to target feed 'em, and now have several rocks completely COVERED in the *(#$)@# things...
(And yeah, Murphy was an optimist, the worse rocks are the ones at the very bottom of a very large aquascape stack that's been in place so long the rocks have fused together, so removal and scrubbing isn't reall an option... )
Some types MIGHT be photosynthetic as well, but I can't confirm that off the top of my head...
)