Are software titles italicized?

The titles of freestanding works (books, movies, plays, albums, etc.) are italicized; smaller parts within these works (chapters in a book, articles in a magazine, songs within an album) are not (they are put in quotes, instead).

How are software titles treated?

My understanding is that if a particular program resembles a book or a dramatic work (like a video game), its title is italicized -- otherwise, it is treated as a proper noun, just like any other product.

I played Grand Theft Auto, instead of reading "Democracy in Ancient Greece" in Microsoft Encarta and preparing my presentation in PowerPoint.

Is this approach correct?

It depends on the style guide you're following.

Wikipedia says yes:

Italic type (text like this) is generally used for the following categories of titles:

...

• Works of art and artifice

  Computer and video games (but not other software)

The Guardian says no:

Use roman for titles of books, films, etc
...
Use italics for foreign words and phrases (with roman translation in brackets)

National Geographic says yes:

The following are printed in italic type without quotation marks:
...
2. Titles of the following:
...
Computer software and CD-ROM and other multimedia product titles
(except applications programs such as WordPerfect)

Take your pick, and be consistent.