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);