This is confusing.

But I have seen it without explanation in quotes and italics:

"This is confusing."

or with 's/he thought' and italics or normal print without or with quotes:

She thought, This is confusing.
She thought, "This is confusing."
She thought, This is confusing.
She thought, "This is confusing."

Or just interjected into the third person story with no distinguishing features:

story...This is confusing...story

It would seem to me that the easiest way to write would still be the direct approach with italics, but that would seem to be hard to read if it went on for several paragraphs.

In either 1st person or 3rd, we know that everything we see is being mediated by the POV character - so distinguishing thoughts from other perceptions is just adding clutter.

Bad example:

Clarissa saw an evil robot monkey coming towards her. Crap. She was going to have to kill it.

-or-

Clarissa saw an evil robot monkey coming towards her. "Crap!" she thought. "I am going to have to kill it!"

It's just clutter the second way, most of the time.

IMO. Mileage varies, etc.

It seems simple and more elegant than just the raw, undifferentiated text. It indicates at least some process of refinement with the ease of reading in mind.

But, simplicity and elegance may not be a valid grammatical criterion. I don't know.

I don't agree that italic is any harder to read than roman.

Also see Varishta's recent post:

Italics in 3rd Person DP

for some other's thoughts.

1. You are in such deep point of view, using direct character thoughts so often and as such a regular part of the narrative that you may as well drop the italics. They denote something special and the direct thoughts simply aren't special anymore.

2. You are using too many direct character thoughts for the story you are telling and you may want to back off a bit. Keep in mind that there are many ways of showing what a character is thinking. Here are just a few:

Oh crap. Here come the evil robot monkeys.

Oh crap, she thought as the evil robot monkeys bore down upon her.

She cursed silently as she watched the evil robot monkeys bearing down upon her.

Jane watched as the tall, dark, and handsome stranger entered the bar. What a hunk.

What a hunk, Jane thought as the tall, dark, and handsome stranger entered the bar.

Jane kept her eyes glued to the tall, dark, and handsome stranger as he entered the bar. (Really, in this case who needs the subvocalized thought? I'm pretty sure we all figured that out.)

Or...

The tall, dark, and handsome stranger entered the bar. What a hunk. (No italics at all. If this is very deep point of view and you're constantly in Jane's thoughts, we'll know she is thinking this. If you're in a lighter penetration, we may still understand that she's thinking this, or take it as a truism.)

"I'll have what the monkey's having," she said.

[This message has not been edited by Spaceman (not edited September 20, 2005).]