"The classic means of giving emphasis to a word or phrase in continuous text is to set it in italic. Common experience suggests that italic is somehat slower to read than roman type and its use in large quantities is not appreciated by readers. Used sparingly, it has the advantage of attracting the reader's attention without disturbing the flow of text.
The same is true of small caps. These are capitals whose optical height is the same as the x-height of the lowercase. They cannot be substituted by a smaller size of capitals, as these will look too pale, on account of their reduction in size. The weight of true small caps is the same as that of their uppercase and lowercase, but their proportions are broader than those of the capitals. Whether or not small caps should be spaced is sometimes disputed; in the author's opinion, this will depend on the design of the type. At all events, readability is generally noticeably improved when small caps are slightly, and more or less evenly spaced. when text is set in small caps, words that begin with a capital letter need also here to begin with a full capital.
Other forms of emphasis - text set in capitals, the semi-bold or bold versions of the text type, underlining, larger size of type, a different typeface, the use of second colour or tones - produce a restless effect, and hinder linear reading. Such forms of emphasis can, however, be not only appropriate but necessary in reference works and schoolbooks, and also have a refreshing effect in experimental books."
From Detail in Typography by Jost Hochuli, published by Hyphen Press
Image from www.typotheque.com