It seems as though the places and objects pane doesn't support html. I changed my alias to something like:
"An Ogre is here and is <color color='red'>badly wounded</color>"
The html code is printed instead of the color being changed. The html support does seem to work fine in room descriptions and hyperlinks. Is this a bug? Limitation? Any way I can change this in the aslx?

It's a limitation of the current UI. In Q5.2 you only get HTML in the main game play area. This will change in Q5.3, not sure exactly how yet though but the lists will be HTML-driven.