Here are the rules as I understand them.
1. For identifying titles, italics and underlining are equivalent. Underlining is merely used when italic is unavailable, namely when writing by hand instead of on a computer.
2. With the rise of computers, underlining titles is archaic. It is very important not to underline titles or otherwise misuse underlining when writing on computers, especially in text to be displayed over the internet, because the underlined text will be confused with hyperlinks. On the internet, underlining is the default style for identifying a link and thus needs to be avoided otherwise.
3. Italicize names of works published by themselves. Use quotation marks around works that are published within another work. For instance, the following are all correct:
- "Ghostwriter" by Kristi Hudecek-Ashwill is a short story in the anthology Holding Fire.
- Dark Sky Paradise is a great album. "One Man Can Change the World" is one of my favorite tracks on it.
- Did you see my article "Why Scott is Cool" in The Wall Street Journal?
- The episode "Scott Tenorman Must Die" is a very funny episode of the TV show South Park.