In addition to soft focus filters, there are also soft focus lenses out there, that work very differently and (according to many photographers, myself included) with better results.
I only have experience with the Canon 135mm f2.8 Soft Focus lens, but all of those lenses should work aproximately the same, so this w/u should apply to them all. I know for a fact that Minolta also makes soft focus lenses, but I’m not sure about Nikon.
How to operate it
The Soft Focus on the Canon 135mm lens has three settings; off, 1 and 2. When set to off, the lens performs just like any other bright 135mm lens. When the setting is on 1 or 2, the soft focus is incurred.
The soft focus function only works on apertures wider than 5.6. The soft focus effect changes depending on the aperture as well; More soft focus on f/16 than on f/8, for example.
What it looks like
When you turn the control ring to 1 or 2, a soft, diffuse glow is added to the picture. This means that small irregularities (for example in skin and other textures) is blurred, while the overall sharpness (focus) of the picture is kept very well. "Dreamy" is a word that describes the effect best.
How it works
By turning the soft focus ring, a controlled spherical aberration is introduced to the lens by turning an aspherical lens element. As a matter of fact, the lens does not add spherical aberration as such, but it rather removes its protection from the aberration, by turning the lens element in such a manner that the light passes through the lens unaltered.
How to mimick it
There is a way to mimick the effect, actually, through double exposures; Do a light metering first, using a large aperture (such as f2.8). Before you take the picture, turn the focus as close as you can get it, throwing your subject way out of focus. Set your camera to manual, and expose half of the shutter time you need (i.e if you need a 1/60 second exposure, use a 1/120 second exposure instead). Now, focus exactly on your target, and do the rest of the exposure.
If you want more blur, then vary the exposure times accordingly - longer blurred and less time non-blurred. Notice that the "sharp" picture adds definition to your final picture, and without the focused picture, your final result is going to look like crap.