Hmm, I did resolve this myself shortly after posting the first message but forgot to post the solution. I really can't remember. What I dó remember is this isn't some kind of bug. It had to do with my understanding of how it should work. How does this help you? Not much I'm afraid. But I'll tell you how I do this now without a problem, maybe that helps.
First I create the style in the stylesheet you can edit from within DNN (Admin, Site Settings, Style Sheet Editor).
I add the following style:
.MitchAndCo {
font-family: verdana;
color: yellow;
background: blue;
font-size: 20px;
}
Now I save the Style Sheet, go to an empty page, add a Text/HTML module.
I first enter the text, then select the text I want to have the new style and select that style in the dropdownlist. Unfortunately the effect is not shown in the editor! I have seen solutions for this but since it involves recompilation I decided to live with this.
Now update the module and probably you won't see the style in effect. Since we have changed a stylesheet which is cached you have to refresh the page to see the effect. And voila, it works.
I kind of hoped I would stumble into the old problem again so I could help you better but 'unfortunately' it works. Hope it helps you anyway.
Ferry