While Netscape wasn't the only company to extend HTML, up until this there hadn't been much overlap..... but suddenly both Microsoft & Netscape created their own (conflicting) add-ons. This is a tad cahotic as they both have huge market-shares (Netscape by being there longer & with a better product IMHO, Microsoft because they gave away the Internet Explorer with '95 and NT.
Since both parties want their browser to be 'better' than the other, they both accept HTML tags ment for the other, leading to terrible confusion.. hopefully it will be resolved with the better tag winning, rather than the better Marketing... (ref VHS v's BetaMax)
So how does an idea get translated into a standard? Well it has to go through the W3C Recommendation Process. which basically means that a consensus has been reached among members that the specification is appropriate for use.
HTML 3.0 was a proposal for extending HTML published in March 1995. The Arena browser was a testbed implementation, and a few other experimental implementations have been developed (see: the Yahoo list of browsers, including UdiWWW, Emacs-W3, etc.).
However, the difference between HTML 2.0 and HTML 3.0 was so large that standardization and deployment of the whole proposal proved unwieldy. The HTML 3.0 draft has expired, and is not being maintained. So there is a new standard HTML3.2.
The complete HTML3.2 reference page.