Emphasis: If you need to indicate stress on a word or phrase, italicizing is the preferred method. Bolding words tends to distract rather than give punch (better for section headings or titles); underlining is too close to a hyperlink. But don’t get carried away with your leaning letters. Try to keep it to one italicized word/phrase per paragraph and no more than two per page. Overemphasis mutes the impact.
Words as words: When you use a word as a word, you italicize. For example, the word onomatopoeia is just fun to say. The reason? This lets the reader know how to understand the usage.
Letters as words: The most famous example of this is when people say that X marks the spot.
Foreign words: Words from a non-native language that are unfamiliar to most of your readers should be italicized. This is a gray area, since the audience may vary. Some people may be used to lederhosen, for example, but others may not. If you’re in doubt, italicize. Your editor can make the call later.
Titles of major works: Consider this a rule with a huge caveat. Namely, some style guides do not use italics this way. But in most cases, italicizing the titles of long or major works is the preferred method. This includes books, novellas, plays of three acts or more, treatises, dissertations, long poems, long musical pieces, booklets, magazines, newspapers, films, TV shows, art, famous speeches, and similar works. (By the way, the Bible is not italicized.) If it takes more than ten minutes to read or watch, it’s probably italicized.
Names of vessels: Here again we have some wiggle room depending on the style guide. Typically, it’s best to italicize the proper names of boats, planes, and spacecraft. You would not italicize the type or company (e.g., Boeing 747 or MasterCraft), but you would italicize Bubba (if that’s the name of someone’s fishing boat) and Sputnik.
Words as sounds: If you tell how a dog grrs at you or how your truck went crunkity-crunk, then you italicize. Note: Don’t italicize words that describe a sound, just the actual sound itself. The dog barked woof.