Small Caps and Bold Face

Your question requires a two-part answer.

\sc and \bf (and \it) are deprecated because, as you have noticed, they override each other. Use either

\textit{...}
\textbf{...}
\textsc{...}

or

{\itshape ...}
{\bfseries ...}
{\scshape ...}

instead.

However, not all fonts contain italic and/or bold small caps (when they even contain small caps).

(Also, italic and small caps usually don't combine at all by default, requiring \usepackage{slantsc} to do so.)

When you load the T1 font encoding, you're replacing the default Computer Modern fonts by CM-Super, a larger but lower-quality set of fonts that look mostly identical but contain many more glyphs. In older TeX distributions, you might even end up with bitmap fonts in your output.

The Latin Modern fonts are a better alternative (\usepackage{lmodern}), but they unfortunately don't contain bold small caps.

For posterity, there is an easier and better alternative. Simply add

\usepackage{bold-extra}

along with your other includes. This lets you keep using the default high-quality Computer Modern fonts for normal text. It works by building a bold Computer Modern small-caps font on the fly and including it for you. Now \bfseries{\scshape{Foo}} works as expected!

Reference: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=bold-extras

Ok, you need to add

\usepackage[T1]{fontenc}

and this updated command should do the trick

\huge \textbf{\textsc{Hello}}

To explain, LaTeX uses the curly braces {} to indicate scope for the formatting command. So if you type

\textbf{ ... }

then all the text between the curly braces is formatted in bold, including the

\textsc{Hello}

Result

Small Caps Bold

compared to regular small caps