Acronyms - abbreviations in all caps most of the time, but sometimes not, and sometimes with a number. Here is a list of a few examples as found on Wikipedia:
* Pronounced as a word, containing only initial letters
o AIDS: acquired immune deficiency syndrome
o ASBO: Anti-Social Behavior Order
o NATO: North Atlantic Treaty Organization
o Scuba: self-contained underwater breathing apparatus
o Laser: Light Amplification by Stimulated Emission of Radiation
* Pronounced as a word, containing non-initial letters
o Amphetamine: alpha-methyl-phenethylamine
o Gestapo: Geheime Staatspolizei (secret state police)
o Interpol: International Criminal Police Organization
o Radar: radio detection and ranging
* Pronounced as a word, containing a mixture of initial and non-initial letters
o Nabisco: National Biscuit Company
o Necco: New England Confectionery Company
o Mavica: Magnetic video camera
* Pronounced as a word or names of letters, depending on speaker or context
o FAQ: ([fæk] or F A Q) frequently asked questions
o IRA: When used for Individual Retirement Account, can be pronounced as letters (I R A) or as a word [ˈaɪrə]
o SAT: ([sæt] or S A T) (previously) Scholastic Achievement (or Aptitude) Test(s), now claimed not to stand for anything.
o SQL: ([siːkwəl] or S Q L) Structured Query Language.
* Pronounced as a combination of names of letters and a word
o CD-ROM: (C-D-[rɒm]) Compact Disc read-only memory
o IUPAC: (I-U-[pæk]) International Union of Pure and Applied Chemistry
o JPEG: (J-[pɛɡ]) Joint Photographic Experts Group
o SFMOMA: (S-F-[moʊmə]) San Francisco Museum of Modern Art
* Pronounced only as the names of letters
o BBC: British Broadcasting Corporation
o DNA: deoxyribonucleic acid
o OEM: Original Equipment Manufacturer
o USA: United States of America
o IRA: When used for the Irish Republican Army
* Pronounced as the names of letters but with a shortcut
+ (triple A) American Automobile Association; abdominal aortic aneurysm; anti-aircraft artillery; Asistencia Asesoría y Administración
+ (three As) Amateur Athletic Association
o IEEE: (I triple E) Institute of Electrical and Electronics Engineers
o NAACP: (N double A C P) National Association for the Advancement of Colored People
o NCAA: (N C double A or N C two A or N C A A) National Collegiate Athletic Association
* Shortcut incorporated into name
o 3M: (three M) originally Minnesota Mining and Manufacturing Company
o E3: (E three) Electronic Entertainment Exposition
o W3C: (W three C) World Wide Web Consortium
o C4ISTAR: (C four I star) Command, Control, Communications, Computers, Intelligence, Surveillance, Target Acquisition, and Reconnaissance
* Multi-layered acronyms
o NAC Breda: (Dutch football club) NOAD ADVENDO Combinatie ("NOAD ADVENDO Combination"), formed by the 1912 merger of two clubs, NOAD (Nooit Opgeven Altijd Doorgaan "Never give up, always persevere") and ADVENDO (Aangenaam Door Vermaak En Nuttig Door Ontspanning "Pleasant for its entertainment and useful for its relaxation") from Breda
o GAIM: GTK+ AOL Instant Messenger
o GIMP: GNU Image Manipulation Program
o PAC-3: PATRIOT Advanced Capability 3 i.e., Phased Array Tracking RADAR Intercept on Target i.e., RAdio Detection And Ranging
o VHDL: VHSIC hardware description language, where VHSIC stands for very-high-speed integrated circuit.
* Recursive acronyms, in which the abbreviation refers to itself
o GNU: GNU's not Unix!
o LAME: LAME Ain't an MP3 Encoder
o WINE: WINE Is Not an Emulator
o PHP: PHP hypertext pre-processor (formerly personal home page)
o These may go through multiple layers before the self-reference is found:
+ HURD: HIRD of Unix-replacing daemons, where "HIRD" stands for "HURD of interfaces representing depth"
* Pseudo-acronyms, which consist of a sequence of characters that, when pronounced as intended, invoke other, longer words with less typing (see also Internet slang)
o CQ: "Seek you", a code used by radio operators (also is an editorial term meaning "Copy Qualified" in print media)
o IOU: "I owe you" (true acronym would be IOY)
o K9: "Canine", used to designate police units utilizing dogs
o Q8: "Kuwait"
* Initialisms whose last abbreviated word is often redundantly included anyway
o ATM machine: Automated Teller Machine machine
o HIV virus: Human Immunodeficiency Virus virus
o PIN number: Personal Identification Number number
o VIN number: Vehicle Identification Number number
Now that we have a bit of an understanding of what they are, how could they be used in your writing?
To begin with, if you're going to use them, make sure they are spelled correctly and used correctly. Some have become a part of our every-day speech and most everyone knows what is meant by their use, even if they couldn't offer you their meaning if asked.
Some I would never use, and that's not because they refer to things I don't write about; it's just that unless you are writing a technical manual pertaining to the subject, most people wouldn't understand the acronym unless it was spelled out, and even then, they might not know what it was.
Some of those listed above, I can't even pronounce the spelled out version. And those with numbers in them; they are too close to texting shorthand and in my opinion, that has no place in a book. It makes me glad I can't use a cell phone out here. If I had one, someone would be sure to text me and it would drive me nuts.
Now, let's talk about how to use them in your writing. As I said before, make sure they are spelled correctly and if you happen to be making one up, make sure you aren't accidentally mimicking one that already has a meaning.
In dialog - all books that aren't textbooks have dialog - just using the appropriate letters may not be enough. For instance AAA is pronounced in two different ways with two different meanings. Be sure what comes out of your characters mouth is what would be heard. Most of those in this list have a pronunciation where it matters. For dialogue, it's pronunciation that is important. And in the occasion where the acronym is somewhat less than familiar or made-up, it is important to clue your reader in to what your acronym stands for. The last thing you want your reader to do is stop and go get a dictionary or go on reading and be slightly confused, if not totally lost.
Personally, I prefer to avoid them altogether, but then there weren't too many acronyms in the days of knights and high magic, nor was there any on Planet Wer, haha. I guess you'll have to read them to see though - just as soon as they come out.
Do you use Acronyms? Tell us what you do to make them clear for your readers.