The principal use of italics in contemporary English is to provide emphasis. Anyone reading the KJV Bible with that background assumption is likely to be misled, however. The KJV occasionally uses italic type, but if you open your Bible and scan some examples, it doesn’t appear to be used for purposes of stress. And the introduction nowhere explains the use of italics in the translation. It is clear, however, that the KJV translators were following the practice pioneered in a number of 16th century translations, including most proximately the Geneva Bible, of using a different typeface(1) to represent words not literally present in the Hebrew and Greek texts, but necessary for the text to make proper sense in English. The LDS BD s.v. “Italics” explains it this way:
In the KJV italics identify words that are necessary in English to round out and complete the sense of a phrase, but were not present in the Hebrew or Greek text of the manuscript used. Such additions were necessary because in some instances the manuscript was inadequate, and the translators felt obliged to clarify it in the translation. In other instances italics were necessary in cases where the grammatical construction of English called for the use of words that were not needed to make the same thought in Hebrew or Greek. Italics thus represent the willingness of the translators to identify these areas. It appears that generally, though not always, their judgment was justified in their choice of italicized words.
I’m curious how widespread knowledge of this stylistic usage is among contemporary Mormons. My guess is that it is probably well known among ‘Naclers, but that it is probably not at all well known among ordinary members. Part of the reason for my sense about this is that I learned of it myself relatively late, after four years of seminary and after a two-year mission, and not until I was involved in publishing my first substantial published article, on the JST (in Dialogue).
An important question for LDS scholars of scripture is whether Joseph knew of the import of KJV italics when producing the BoM and JST. Royal Skousen is of the view that he likely did not; see this preliminary discussion (although his detailed treatment has not yet appeared, but will be in a forthcoming volume of his BoM textual commentary). In contrast, David Wright is of the view that Joseph did understand the import of italics; see for example here.
I am a great admirer of Skousen’s scholarship, but on this particular issue I have to agree with Wright. I think there are basically three types of evidence favoring the conclusion that Joseph understood the meaning of the italicized words. First, and most importantly, is the distribution of the variants in Joseph’s inpired translations, which show a clear (though by no means absolute) tendency to revolve around the italicized words. Skousen and Wright agree roughly on this distribution, which is somewhere in the neighborhood of 30%, give or take, but they draw different conclusions from it. My experience spending a fair amount of time examining variants is that the italics were a significant factor.
Second is the practice of often crossing out italicized words in the “marked Bible” used as an aid in preparing the JST. Anyone with access to the critical text can see this phenomenon for herself, since they have actual pictures of the marked Bible text.
Third are near-contemporary statements from Joseph’s milieu evincing a familiarity with the purpose of the italics. A prominent example is this from a W.W. Phelps editorial in the Evening and Morning Star (January 1833):
The book of Mormon, as a revelation from God, possesses some advantage over the old scripture: it has not been tinctured by the wisdom of man, with here and there an Italic word to supply deficiencies.—It was translated by the gift and power of God. …
For further examples, see Note 25 here.
This suspicion towards italicized words demonstrates why, ultimately, it was a bad idea to represent such interpolations with a different typeface. (Witness the fact that modern translations no longer follow this older fad in the art of translation.) It was certainly done with the best of intentions, to provide complete transparency and disclose where the translator had left his mark. But people unschooled in actually doing a translation got the wrong idea from this. First, it gave the appearance that translation is a mechanical, verbum pro verbo process, and it is not. And it also gave the impression that the italicized words might not be strictly necessary to the translation, which was the wrong impression to give.
In Gen. 1:4, we read: “And God saw the light, that it was good….” Hebrew allows the formation of sentences without the copula, where English requires it. Should we instead render “And God saw the light, that good….”? Surely not.
In the genealogy of Jesus from Luke 3, say at v. 24, we have: “Which was the son of Matthat, which was the son of Levi, which was the son of Melchi….” Would it be more accurate to remove the italicized words, leaving “Which was of Matthat, which was of Levi, which was of Melchi….”? No. In Greek descent may be clearly shown simply by using the genitive, but trying to do that in English would unnecessarily introduce an obscurity and ambiguity to the text.
So, although well intentioned, the use of italics was often misunderstood by lay people. In my view it is preferable when translating not to try to draw this kind of distinction for the reader. A translation has both a source language and a target language, and making the text sensible in the target language is simply a part of what a translator must do.
(1) The 1611 first edition of the KJV was printed in black-letter (gothic), with the translator interpolations in small roman type. The next year, due to demand for a roman type edition (to match the Geneva Bible), the interpolated words began to be printed in italic, which is the practice followed in contemporary KJV editions.