Underlining (or Highlighting): Cueing the Computer Brain
Quoted directly from The Teaching of Reading and Spelling: a Continuum from Kindergarten through College
There are many good reasons to get your students in the habit of underlining (or highlighting) words which they don't know while they are reading. The most obvious is that it allows you, the teacher (or parent, as the case may be) to find out which words they don't know.
It also leaves a record which can be rewarding to both you and your students when you later on have them re-read from a book with loads of underlined (or highlighted) words which they--by then--can read.
As a teacher, I learned to prefer having my students mark up their books with pencil marks than to copy something and call it a book report. By giving students the choice of writing a 500 word report or underlining (or highlighting) words they don't know, I usually was able to get students to do it my way. And my way did have its built-in teacher advantages. I could easily tell:
1. How far into a book they were. If words are only underlined (or highlighted) in the first 25 pages, that's as far as they are.
2. Whether or not the book is too easy or too difficult.
a. More than five underlined or highlighted words per page may indicate it's too difficult. Certainly three underlined (or highlighted) words per line (as has happened!) indicates the book might as well be written in Sanskrit.
b. No underlined (or highlighted) words or only one every five or six pages usually indicates the book is too easy. In fact, no underlined (or highlighted words usually meant that the student hadn't read the book. Of course, there will always be those who think they are smarter than the teacher. They will swear up and down that they read all 1200 pages of Tolstoi's War and Peace, but didn't underline or highlight any words because they knew all of them. A quick check of: