TFS has changed how Excel interacts with HTML fields to only allow HTML fields to be editable on creation of a work item but read only when editing existing work items.

What was the old behavior?

With the 2008 TFS Excel Add-In you were able to edit work item HTML fields in Excel, but all of the formatting tags were stripped out, publishing any changes as plain text.

Why was it changed?

This behavior prevented teams from using the full power of the HTML fields because they were concerns about data loss. In addition to formatting being lost, html links and other tags were stripped out as well.

What out of the box work items use HTML fields?

There are many work item fields that use HTML fields, for example: Repro Steps, Test Steps, System Info, etc. Beyond this set the fields are used to provide refinement information like in a Change Request such as Impact to Arch, Impact to Test, etc. Several customers have proposed we change the Description field type for the Task work item type from ‘PlainText’ to ’HTML’ in a future TFS release.