Google’s Search Results Ditch Underlined Links, Increase Font Size

Underlined links are discoverable -- it's obvious at a glance that they are links, rather than body text.

Underlined links are noticeable -- they stand out from a sea of non-underlined text, drawing the eye to them.

Underlined links are self-explanatory -- it's obvious what you're supposed to do with them (i.e. click).

These are all valuable UI benefits.

The solutions that most sites that have abandoned underlined links have taken up in their place all have drawbacks compared to the good old underline:

Underlining the link on hover/rollover reduces discoverability -- you don't know for certain whether something's a link or not until you investigate it.

Making links a different color reduces usability for the color-blind; red-blind people have no idea that your red links look different than your black text does.

Making links bold, italic, or a different size all leave the possibility of confusing the link with body text that happens to share the same typographical presentation. (You can underline text too, of course, but that's relatively rare on the Web because of the strong association of underlining with links.)

Nobody cares about this argument anymore, I know, so I don't expect anything to change because of it. I just think it's worth noting that there are good reasons to prefer underlining links that don't boil down to "stuck in 1996".