What is the editor selection when you open the style dialog - have you selected a piece of text, a table cell, image, etc.? I tried a very simple test - selected a piece of text, opened the style builder and selected a font name and font size. After I clicked the OK button the text was correctly changed. I also tried some other properties (e.g. background image). The only properties I had problems setting were the foreground(text) and background colors. For some reason they were not applied. I tested using IE 7 and Firefox 2.
the Telerik team