The instructions listed at http://homepages.inf.ed.ac.uk/sterratt/progs/italic-small-caps-times-latex work fine for me. Please note that you not only need the times-itsc.sty file but also several other font files which come all together in one compressed file.
Here again with more details (targeting TeXLive under Linux):
- Download the font files as Tar.GZ archive file http://homepages.inf.ed.ac.uk/sterratt/files/times-itsc.tgz
- Unpack it, e.g. using
tar -xzvf timex-itsc.tgz in your TEXMF folder, e.g. ~/texmf.
- Run
texhash ~/texmf or make sure there is no ~/texmf/ls-R file.
Compile the following test file:
\documentclass{article}
\usepackage{times-itsc}
\begin{document}
\textsc{Hello \emph{world}}
\end{document}
The output should look like:

If this doesn't work please tell us about your LaTeX installation (OS, TeX-Distribution) and which exact error you got.