It's possible and beneficial to do all the file editing operation in Javascript, without post back. Only in rare cases, for one or another reason, posting to the site would be required: if one needs to submit the text being edited for some complex server-side operation; other requests would be "get", and also pretty rare, if any at all.
Therefore, having ASP.NET, ASP, or any other server-side technology does not matter much.
Now, here is the basic idea. Write this simple code sample in HTML:
<p contenteditable="true">This is an editable paragraph.</p>
(The sample is taken from
http://www.w3schools.com/tags/att_global_contenteditable.asp[
^].)
If click on this paragraph and you try to paste some colored/formatted fragment text, you will see that different colors and fonts will work. Try also this:
<p contenteditable="true">This is an editable paragraph. <span style="color:red">This text is colored.</span></p>
This is how you can develop a whole HTML editor with styles and all formatting features. You just need to create some menu/toolbar with styles and format; and the clicks on those menu items or toolbar buttons should modify the content with appropriate styles. You can also add CSS editor (can be simple text editor).
Also, you can find a good number of Javascript HTML editors and see how it all works. See, for example, this one:
http://en.wikipedia.org/wiki/TinyMCE[
^],
http://www.tinymce.com/[
^].
—SA