I'll admit that annotating/highlighting books has given me a lot of trouble since I started really delving into and analyzing history books. I hate having to constantly stop to highlight key passages or make comments in the margins. I've found that this stopping-and-going means that I never get in the rhythm of the author's narrative or follow the author's train of thought. One compromise that I made instead of highlighting the actual text is to draw a vertical line in the margins next to passages that I want noted or, if an entire paragraph should be remembered later, I put a star by the paragraph. These quick little notations never draw me out of the book's narrative like highlighting does. I do this throughout the book, with perhaps the occasional comment in the margins.

After finishing the book, I make a 1-2 page summary/critique of the book that is based off of my quick review over the passages I marked. I normally spend an hour or so doing this, supplementing my review of the book by reading other (scholarly) book reviews. The book summary/critique then goes into a file I have of other books.

My opinion is that there is no need to spend an inordinate amount of time highlighting or marking a book. To me it actually hurts your ability to comprehend the author's argument by making reading a chore. Just read the book as you would normally, making quick marks as you go along. I've discovered that no matter how intense you mark up a book, a year later, you won't remember much more than the author's main argument anyway. If you ever need an in-depth refresher on a book you read long ago, those 1-2 page reviews are great for that.

As for what should be highlighted, I think it depends on what you're reading. If it's a popular history book or a synthesis on a subject, I actually don't think it's important to highlight anything. If you are reading books like these, you are either wanting a general "sense" of the subject or are just skimming the books for the author's broad argument. For more specific monographs, I tend to mark up the introductions and conclusions pretty exhaustively because those are the sections that often have the most relevant information I'm looking for (thesis and placement within the historiography). For chapters in the body of the book, I don't mark too much and save that material for the summary.

The key thing with highlighting/annotating is that you don't want to mark too much. The more you highlight the less significant all of your highlighted sections become. For me, the 1-2 summaries end up being far more important than any marks I make within the book.