I've used two formats in the same book, depending on the context.
Example 1 -
It irritated him when property was damaged, but there was always damage when dealing with demons. Just once, he thought, it would be nice to settle these problems in a wide open field, with nothing to spoil but daisies.
Example 2 -
What about Doris? He remembered the way she had danced. The way she had been the centre of attention. He’d done her a great deal of good last night by boosting her confidence. He hadn’t exactly done her any harm, had he?
Had he?
Numbness washed over him as if he had stepped into death’s own cloak. The last trace of colour drained from his cheeks and he sank heavily onto his bed. Exactly what had he promised her last night? And where had she gone after the party had finished?
Both of the examples above have moments of inner dialogue, but while the first is a literal quotation of what is being thought, the second is a window onto the character's thought process.
Would you have handled them differently?