Bacon's cipher: An Intro to Steganography
Python 3, 216 211 231 225 207 bytes

This is a solution that uses normal text and Markdown-style italics for its two typefaces. And it encodes everything in the carrier message except the spaces.
Edit: Had to fix the code so that the result would print correctly and added examples below the code.
Edit: Edited the code to previously worse uppercase/lowercase solution, due to problems in printing the italics correctly.
def g(s,c):
 c=c.lower();w=[h.upper()for h in s if h.isalpha()];t=''.join(&quot;{:05b}&quot;.format(ord(i)-65)for i in w);r='';j=m=0
 while t[j:]:a=c[m];x=a!=&quot; &quot;;r+=[a,a.upper()][x*int(t[j])];j+=x;m+=1
 return r+c[m:]

Examples
&gt;&gt;&gt; g('HELLOWORLD', 'The quick brown fox jumps over the lazy dogs, gamboling in the fields 
where the shepherds keep watch')
'thE QUicK broWn FOx JuMPs OVEr ThE LazY DOgS, gaMbOlINg in THe fields where the shepherds keep watch'

Ungolfed:
def bacon(message, carrier):
    # Lowers the case of the carrier message
    carrier = carrier.lower()
    # Removing all non-alphabetic characters and making the rest uppercase
    words = &quot;&quot;
    for char in message:
        if char.isalpha():
            words += char.upper()
    # Encoding the message
    binary = &quot;&quot;
    for letter in words:
        encode = ord(letter) - 65
        binary += &quot;{:05b}&quot;.format(encode)
    # Encoding the carrier message
    result = &quot;&quot;
    bin_index = 0
    char_index = 0
    while bin_index &lt; len(binary):
        letter = carrier[char_index]
        # If letter isn't a space and it needs to be encoded
        if letter != &quot; &quot; and int(binary[bin_index]): 
            letter = letter.upper()
        result += type + letter + type
        # The encoding only proceeds if letter wasn't a space
        bin_index += letter != &quot; &quot;
        # char_index increments whether or not letter was alphabetical
        char_index += 1
    # Return the encoded text and any leftover characters from the carrier message
    return result + carrier[char_index : ]