I was able to reproduce this on FF .
This is the outcome I'm looking for:
Type some text. Change the Font Color by using the Font color picker (choose red)...
Here. All text from "Here" should now be red.
In Firefox, It appears that you can't have a blinking cursor and use the Font Color Picker. You MUST highlight a block of text in order to get it to change colors.
This would be fine if the behaviour were consistent between IE and FF, but they're not.
IE does something much different (change font color on blinking cursor changes the entire line of text).