Painting - Chaulking wood siding

I am stripping the exterior paint off my woodsided Victorian house. After stripping the paint, I am left with some gaps (about 1/8") in the siding. There is a hard and brittle puddy-like substance to in these gaps. For the most part the filler just falls out when I'm stripping. Anyways, I would like to fill the gaps again with chaulk, but I remember reading somewhere that you should only fill vertical gaps with chaulk and never horizontal gaps on wood siding. The reason for this is that the gaps are important for the wood to breath and not trap any moisture. Can anybody give me any suggestions. Thanks Jeff

Any loose caulking should be removed, and new caulk should be applied. The only thing you don't want to caulk is the bottom side of your lap siding, because that could trap water behind your siding. Vertical joints and perimeters of windows and doors- all sides- should be sealed.

If there are any splits/cracks in the siding, they should be caulked also.