I reported the following issue to Adobe, and they eventually updated their documentation (see http://help.adobe.com/en_US/FlashPlatform/reference/actionscript/3/flash/text/TextField.html#text).
I however still think this deserves a Flash wtf!
import flash.text.*; var field1 = new TextField(); field1.x = 0; field1.width = 500; field1.y = 10; field1.text = "This text field is not interpreted as html"; this.addChild(field1); var field2 = new TextField(); field2.x = 0; field2.width = 500; field2.y = 50; field2.htmlText = "This text field is interpreted as html"; this.addChild(field2); var field3 = new TextField(); field3.styleSheet = new StyleSheet(); field3.x = 0; field3.width = 500; field3.y = 100; field3.text = "also interpreted as html!"; this.addChild(field3);