@hingehead,
Hang on - it worked for me!
When you mark it with a color does it look like this in the edit screen?
Code:[color=#BF8000]Hang on - it worked for me![/color]
If it doesn't then maybe you have javascript disabled. If it does look like that then I'd suggest it's how your browser is resolving the html.
Try editing the color code slightly by putting quotation marks around it and see if that helps, like so:
Code:[color="#BF8000"]Hang on - it worked for me![/color]