Currently Telerik Reporting does not operate with HTML content. Exception is when the report is rendered in HTML because the browser that usually displays the report, handles the HTML itself. Unfortunately the rest of the supported formats - Image (GDI), PDF, XLS, RTF do not support HTML out of the box, which means that we have to render the HTML on our side. Our developers are currently working on rich textbox item that would be introduced for the Q1 2009 release.
Sorry for the inconvenience and thank you for the understanding.
the Telerik team
Check out Telerik Trainer
, the state of the art learning tool for Telerik products.