The purpose of italic typefaces is to aid comprehension by separating off certain words and phrases from their surrounding text. But when exactly should you use italics?
The basic purpose in typesetting a story or article for a book, newspaper or periodical, for print or online, is to enhance understanding of the text and thereby make the reading an easy, pleasant experience.
Roman type is the straightforward, upright type we read everyday in our newspapers, magazines and books, and on our monitors.
Italic is the 'handwriting' equivalent of whatever roman font we are reading. It has a sloping cursive quality that reminds us of the manual writing we learned in primary school.
Bold type is roman or italic font that has been emphasized by thickening and making it darker than the surrounding text.
The question is: when should we use which version of a particular typeface - roman, italic, or bold? The answer must focus on the reader's needs and the reading experience.
It is obvious that for most copy the roman version of the chosen font should be used. This is because, having an upright face, it is the easiest to read and it is what readers expect.
Because the bold version of a font makes text stand out strongly, it is used for highlighting important words, phrases and sections. Thus headlines, decks and subheads set in bold will, along with pull-quotes and other tricks of the typesetter's art, provide the casual scanner with clues as to what your article or story is all about. The judicious use of bold in this way will induce him or her to read the main story.
Bold however is too strong to be used, except very occasionally, within body text. To set off words from surrounding text is the main function of italics.
So when should you use italics exactly? Here's a sort of check-list, a mixture of accepted practice and my personal opinion.
Most of these when-to-use-italics rules apply equally to words in body copy, head-lines and captions, and whether you are typesetting books, articles, stories or web-pages.
 The names of ships and aircraft; eg: The Caribbean Cruiser sank yesterday. This is the oldest when-to-use-italics rule. It allows the reader to quickly grasp what is being referred to in the message.
 The titles of poems; eg: As You Go Dancing by James Stewart is famous among the literati of the Arabian Gulf. This is another very traditional use of italics that enables quick reader-uptake.
 Foreign words; eg: We turned left and found ourselves in a cul de sac. Another very traditional use of italics that makes for quicker reading.
 The titles of books, newspapers, articles and stories occurring within a sentence without further explanation; eg: The Saturday edition of the Limerick Leader was always on the streets by Friday afternoon.
However titles that appear within larger works are not italicized but are set off in quotation marks; eg: 'An Irishman's Diary' in the Irish Times is sometimes interesting.
 Latin phrases used to classify living things; eg: Many people wonder why mankind is referred to as homo sapiens. Another use of italics that has been around ab aeterno.
 Where a word is used as an example rather than for its meaning; eg: The word Kennedy is a proper noun. This is neater than setting the noun within single quotes as in: The word 'Kennedy' is a proper noun.
 For introducing new terms; eg: In Freudian psychology reference is made to the ego, the super-ego, and the id. This is a neat solution to highlighting words that will probably be explained later.
 For the subjects of definitions; eg: An odd number is any number that cannot be divided by two. This is useful for the reader as, should he or she wish to refer back to the definition later, a word in italics among a sea of roman letters is easy to find.
 For mathematical symbols: eg: The standard acceleration of gravity g is 9.81183 metres per second per second. The symbol does not need to be surrounded by commas or single quotes which would be required if it were set in roman type.
 For emphasis; eg: Janice wasn't the only girl at the party. The use of italics for emphasis is less intrusive than bold and more subtly suggestive.
 To indicate a character's internal reflections in stories; eg: This just does not seem right, Janice thought. However many writers prefer other ways of expressing inner thoughts.
 Using a letter or number as a noun; eg: He was vexed because they had left out the d in his name. However many writers would prefer to put a letter or number used in this way between quotes: eg; He was vexed because they had left out the 'd' in his name.
That's about it for the when-to-use italics rules. Except, what should you do if you need to use italics within italics?
If some word or phrase that should be italicised is already within a run of italics, the trick is to switch back to roman type for that word or phrase; eg: I'm in a really weird situation, Janice thought.
This italics-within-italics solution works best when italics are used to highlight internal reflections; eg: Why can't we just look up Wikipedia for the answer? he wondered to himself.
Of course, you don't have to follow these when-to-use-italics rules. However most of them are in current use because they do aid reader comprehension.
Indeed, most of us have an instinct as to when the use of italics is appropriate. Perhaps you can devise better rules of your own. If so, let me know.