First of all, you wouldn't put "lumière" (light) in all caps, as we did in the subhead above, just to make a point. There are, indeed, rules to follow, and you shouldn't capitalize French titles willy-nilly. English speakers should understand that the capitalization of titles and names in French and English exhibit several differences, all of which involve words that are capitalized in English but not in French. This means there is, by and large, less capitalization in French than there is in English.
In English, the first word of a proper title and all subsequent words, except short articles, conjunctions and prepositions, are capitalized. The rules are more complicated in French, and the table below examines three schools of thought regarding French capitalization of titles and names*.
Standard Capitalization
In French, capitalization depends on the position and the grammatical function of the words in the title. The first word is always capitalized.
If the first word is an article or other determiner, the first noun and any adjectives that precede it are capitalized, like this:
Trois Contes
Un Cœur simpleIf the title consists of two words or phrases of equal value, they are considered "co-titles" and each one is capitalized according to the above rules, as in:
Guerre et Paix
Julie ou La Nouvelle Héloïse
This system is used in "Le Petit Robert," "Le Quid," and throughout the "Dictionnaire de citations françaises."
"Le Bon Usage," considered the bible of French grammar, briefly discusses an inconsistency in the capitalization of titles. It does not mention the system above, but it does list the systems in 2. and 3. below.
Important-Noun Capitalization
In this system, the first word and any "important" nouns are capitalized, like this:
Trois Contes
Un Cœur simpleLe petit Robert
Le nouveau petit RobertLe Bon Usage states that system 2. is more common than 3. and uses it in its own bibliography.
Sentence Capitalization
In this system, only the first word of the title is capitalized (except proper nouns, which are always capitalized).
A number of websites use this system, crediting it either to the "MLA Handbook" or to "normes ISO" ("norms of the International Organization for Standardization"). It is difficult to find any official online documentation for either of these sources.
If you look at the spines of a few dozen French books, you will see capitalization is split about 50-50 between Important Noun Capitalization and Sentence Capitalization.
In the end, what will probably work best is to decide which system works best for you, and stick with it consistently.
Proper nouns, as we mentioned above, are not affected by these capitalization systems; they always follow their own rules of capitalization.
*Capitalization of Surnames
French surnames (family names) are often capitalized in their entirety, especially in bibliographies and administrative documents, like this:
Gustave FLAUBERT
Camara LAYE
Jean de LA FONTAINE