That is the ever-bothersome question, is it not?
Everybody has an opinion on whether italics should be used, and how they should be used, and how often they should be used, and why they should be used. And chances are, writers, if you listen to five different professionals' thoughts on the subject, you'll come away with five different answers. I've heard quite a few myself. Some people say "It's a tool that's there to be used, so use it if you need it." Others say "Let the readers decide for themselves how the words should be emphasized, without you the writer telling them how they should hear everything." Everyone and their dog, it seems, has a different idea of what the proper use of italics consists of.
It's fairly common for young or beginning writers to way overuse italics in their writing. Like, every word that they think should be even slightly emphasized gets put into italics. After all, how are the readers supposed to know how it's supposed to sound if the writer doesn't tell them, right? Don't worry, I'm as guilty of this as anybody else. If you've ever read Emily of New Moon and chuckled (or cringed) at Emily's excessive use of italics, you have some idea of what my early writing was like. I was a proud member of the "It's-a-tool-that-exists-to-be-used" campaign.
However, as I continued learning and growing in my writing, I began to see the truth in the idea that overuse of italics can be a sign of weak prose. Think about it: if you feel like you need italics to make your writing look active, or to strengthen your sentences... well, you're probably putting a Band-Aid on a wound that needs stitches. In other words, work on getting your writing strong enough to stand on its own without the aid of purely visual effects like italics.
Of course, there are cases where italics should be used. The titles of books, for example, should always be italicized. And once in a while, if something really important hinges on the way a particular word is interpreted ("You're the traitor!" versus "You're the traitor!"), then italics are okay. (Jeff Gerke has a great article on this Here on his website.) Also, as an editor, I have to say this: if you decide that a word truly does need to be emphasized, for goodness' sake, just use italics! Don't use bold, or underline, or all-caps, or any combination thereof. Just use italics. Period.
Part of what broke me of my tendency to overuse italics in my writing was hearing the statement "Overuse of italics constitutes micro-management on the part of the author". I don't remember who said it, but it hit close to home for me. Having done time... er, I mean, worked... in the corporate world, where your entire life is micro-managed by your bosses and your bosses' bosses and their bosses who have never even met you but are nonetheless experts on what will make you work most efficiently (I'm not bitter or anything), I'm really turned off by the term 'micro-management'. So if my overusing italics means I'm micro-managing my readers' reading experience, I'm gonna start cutting out some italics, believe you me.
One problem I still struggle with, though, is the area of characters' thoughts. Some, like Jeff Gerke, argue that characters' internal monologues don't need to be italicized, that the readers can tell what is supposed to be narrative and what is supposed to be thought. At the same time, though, in a fast-paced scene where there's lots of action, dialogue, and narrative mixed together, italicizing a character's thought might just make it easier for the reader to sort everything out, I think.
Another issue that writers of speculative fiction have to deal with is mind-speaking, or telepathic conversation, or whatever you prefer to call characters communicating with only their thoughts. I've seen it done in standard font using only quotation marks like a normal spoken conversation, I've seen it done in all-italics, and I've seen it done using both italics and quotation marks. Jeff Gerke condemns the use of italics and quotation marks together, but Donita K. Paul uses it frequently in the Dragonkeeper Chronicles when her characters mind-speak with each other. In her writing, the viewpoint character's thoughts are in italics with no quotation marks, and the other person's thoughts are italicized and enclosed in quotation marks. Personally, I thought her method made thought conversations clear and easy to follow, but there are people I know who disagree with me. Unfortunately, it's one of those issues where there really is no solid right or wrong answer... and we writers are probably doomed to argue among ourselves about it until the Second Coming.
What are your thoughts on the proper way to use italics, especially in non-verbal, 'mind-speaking'-type conversations?