Here's a short scene written in Slugline:
Pretty standard stuff. In addition to the Scene Heading, Action, Character, Parenthetical, and Dialogue elements, the writer has adopted the recent trend of putting a character's first appearance in bold as well as UPPERCASE. The ship's name is italicized, and there's some underlining for effect.
Here's what the Fountain file for that scene looks like:
EXT. OPEN OCEAN - NIGHT. A US Navy cruiser CRASHES through rough seas. This is the *USS Cape St. George,* and she's in trouble. Signalman **BELMONT** (20s, soaked) struggles to keep his footing at his station. BELMONT (into radio) Mayday! Mayday! This is the USS Cape Saint George declaring a state of emergency! A MASSIVE WAVE breaks across the bow, sending Belmont crashing to the deck. The radio SHATTERS. As he struggles to regain his footing, another, larger wave BLOTS OUT THE NIGHT SKY. Belmont braces for the impact -- and then recoils in horror as he realizes something impossible: _It's not a wave._
Even in raw text form, the scene is eminently readable. This is the stated goal of Fountain—the plain text file should read like a screenplay.
Notice that this readability extends to the emphasized text. The last line feels underlined because of the bracketing underscores. The ship's name *feels* italicized.
The same characters that trigger Slugline and other Fountain apps to format the text, also cue the reader to "see" the emphasis in the raw file.
I'm not really sure why surrounding words in asterisks creates such a similar reading experience to true italics—but I do know there's nothing new about the practice. For as long as I've been using email, I've seen folks use bracketing asterisks to *emphasize* words and phrases. Even David Mamet has done it, according to his widely-publicized letter to the writers of The Unit:
IF THE SCENE BORES YOU WHEN YOU READ IT, REST ASSURED IT *WILL* BORE THE ACTORS, AND WILL, THEN, BORE THE AUDIENCE, AND WE’RE ALL GOING TO BE BACK IN THE BREADLINE.
The entire letter, in which Mamet urges his writers to eschew "clarity" in favor of drama, is a must-read of course—even in its bracing all-caps. Coming out of the gate with the internet equivalent of yelling, and presumably not trusting his email to reach every reader with rich-text formatting intact, Mamet emphasized choice words and phrases with the only option left to him: asterisks. It's easy to assume his points were made.
Fountain's conventions for **bold,** *italics,* and _underline_ are inspired by (but not identical to) those of Markdown. Markdown's creator, John Gruber, recently dug into the history of the convention, and traced it back to an interesting pre-internet origin.
I don't really care so much when or how the practice originated. I'm just delighted that a lightweight mechanism for marking the text emphasis that matters to screenwriters also happens to make for a wonderfully simple, human-readable text file. It's one of the things that makes Fountain work — and it works very well indeed.