[found on grammar.about.com; by Richard Nordquist]

“Style guides disagree on which words to capitalize in a title (of a book, article, essay, movie, song, or video game). Here’s a basic guide to the two most common methods: sentence case and title case….

There’s not a single set of rules for capitalizing words in a title. For most of us, it’s a matter of selecting one convention and sticking to it. The big decision is whether to go with sentence case (simple) or title case (a little less simple).

Sentence case (also known as Down style)

Capitalize only the first word of the title and any proper nouns: “Rules for capitalizing the words in a title.” This form, recommended by the Publication Manual of the American Psychological Association for titles in reference lists, is popular with many online and print publications. In fact it’s now the standard form for titles and headlines in most countries–but not (yet) in the United States.

Title Case (also known as Headline Style or Up Style)

Capitalize the first and last words of the title and all nouns, pronouns, adjectives, verbs, adverbs, and subordinating conjunctions (if, because, as, that, and so on): “Rules for Capitalizing the Words in a Title.”

It’s the little words that style guides disagree on. The Chicago Manual of Style, for instance, notes that “articles (a, an, the), coordinating conjunctions (and, but, or, for, nor), and prepositions, regardless of length, are lowercased unless they are the first or last word of the title.”

But The Associated Press Stylebook is fussier:

• Capitalize the principal words, including prepositions and conjunctions of four or more letters.
• Capitalize an article—the, a, an—or words of fewer than four letters if it is the first or last word in a title.

Other guides say that prepositions and conjunctions of fewer than five letters should be in lowercase—except at the beginning or end of a title. (For additional guidelines, see the glossary entry for title case.)

So pick a form—any form. And then try to be consistent.”

[found on http://grammar.about.com/od/grammarfaq/f/capitalstitle.htm]