You can either use the buttons at the top to format your text or use certain key-shortcuts.
The buttons from left to right:
Bold, Italics, Underline, Text Color, Text Background (this only sets the text background color, not the edit-background. To change the notepad background color go to the options dialog), Text Font, Clear All Styles ( use this to get rid of all text- and paragraph styles), Bulleting, Numbering, Options, About, Help, Minimize, Close
Keyboard shortcuts:
Ctrl+Shift+B: Bold
Ctrl+Shift+I: Italics
Ctrl+Shift+U: Underline
Ctrl+Shift+1: Bulleting
Ctrl+Shift+2: Numbering
Depending on you OS the following styles are also available (unsupported):
Ctrl+Shift+,: scale font up
Ctrl+Shift+.: scale font down
Ctrl++: subscript
Ctrl+Shift++:superscript
Ctrl+Shift+a: uppercase
Ctrl+Shift+L: cycle bulleting style