Forum OpenACS Q&A: Response to OpenACS web site
The original code (running on openacs.org) doesn't allow you to change that. Instead the formatting code does a quick check to see if there are any <p> tags in a plaintext-formatted post, and if so, ignores the plaintext setting and formats it as an HTML posting anyway.
This has the unintended consequence that if you post something where you *do* want it to be plaintext, because you need to quote a bunch of HTML code that you want displayed verbatim, well, you can't. You have to do the &lt;foo&gt; thing.