Chuck got back to me and posted the mod to enable HTML within the classifed ads text field:
try editing uploadproduct.php and find this line
$desc = fixmessage( $desc );
comment it out like this
//$desc = fixmessage( $desc );
You know this is a security feature
I made the change and it appears to work just fine now.
But I am not certain about how this will affect the viewing of the ad listings if there is a lot of HTML code being displayed. Might proof to be rather distracting. I may be tempted, if that is the case, to eliminate the display of the description text in that short preview-like display in the ad listings anyway. But I figure I'll wait and see how things go first.