Welcome to my perfumed garden

I'm going with starwatcher307 here. Use breaks and indicate who's speaking in the first sentence or as soon as possible. Formatting is nice but you always have to consider whether it enhances the readers' experience or not. I wrote a story with inner thoughts, flashbacks, and a third-party sorta mental-telepathy intrusion all in different fonts/italics, etc. and it was messy as hell. I'd have done far better to have saved the fancier formatting for the third-party thing and used plain breaks/punctuation stuff to set the rest of it apart.