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There is no problem with italic font. In fact I wouldn't have problems with any kind of font as long as it's readable. There is no wordlimit, either. Only think you have to take care of is that you write more than 200 words, which shouldn't be a problem. However, some people might not read the entire story if it's too long. I think I got around 950 words (beginning included).
Btw@Tania: I haven't read your entire story yet (will do when voting starts), but though it's detailed and fluent, I'd like to state that you tend to use the same words/ phrases quite often. If you read through it, you'll see that some sentences directly following each other start or end with the same words which sounds a bit strange. Not everytime, but just have a look at it while rereading the story. Other than that you seemingly have done a pretty great job (as I said, haven't read all of it yet)
Btw@Tania: I haven't read your entire story yet (will do when voting starts), but though it's detailed and fluent, I'd like to state that you tend to use the same words/ phrases quite often. If you read through it, you'll see that some sentences directly following each other start or end with the same words which sounds a bit strange. Not everytime, but just have a look at it while rereading the story. Other than that you seemingly have done a pretty great job (as I said, haven't read all of it yet)