If the TextField is set to dynamic then you can make the text htmlText and you can surround the text you want selected in <span> tags and use css.
Why would I need to do this? Shouldn't the method I am using work? It seems like a real bug to me!
Thanks for the comments.
Sorry I'm pretty inexperienced. What is t84?
I noticed in flash help this:
Note: This method will not work if a style sheet is applied to the text field.
If you have a stylesheet applied then that would explain it otherwise I don't know.
Most likely your main problem is that you are trying to combine timeline created things and actionscript.
I just made a simple little test and I can't get the same behavior you are seeing. I have a timeline created textfield with some text in it. When I click and select the timeline goes elsewhere and after awhile it comes back, but my text is just black. If I re-execute the frame with the formatting code then it looks just like it did the first time. Of course since I left the frame and the textfield doesn't exist the selection goes away.
Anyways I think you have something else going on.