The following parameters are supported:

html	html="This is a <b>bold</b> word"	HTML content
or
htmlfile	htmlfile="filename"
charset	charset="iso-8859-1"	character set. For a complete list see here. Default value is "utf-8"
font	font="Arial"	font name
size	size="11"	font size
color	color="#000000"	RGB value
bgcolor	bgcolor="#CCCCFF"	RGB value
bordercolor	bordercolor="#0000FF"	RGB value
multiline	multiline="1"	1 or 0, default 0
wordwrap	wordwrap="1"	1 or 0, default 0
width	width="250"
height	height="400"

NOTE:
Changes in the "html" or the "htmlfile" parameter are immediately reflected in the box content.

In XML files the characters < > & " ' may not be used as data. So if you use the "html" parameter, these characters has to be coded as: &lt; &gt; &amp; &quot; &apos;

The HTML supported by Adobe in the TextField class is very limited.
You can read about it here:
http://livedocs.adobe.com/flash/9.0/ActionScriptLangRefV3/flash/text/TextField.html#htmlText