Right so you want to create a click-able bit of text. So you create a TextField and stick your text in there and then you'll be wanting to addEventListener on that. Excellent, you've made your text click-able.
You might be thinking "that's great, but why doesn't my mouse pointer change when I hover over the text". Well, that's because you need to define the buttonMode to be true, to tell Flash that this thing you're creating is going to be a bit like a button.
However, TextFields can't have a buttonMode. Only descendants of Sprite can have buttonMode. So what you need to do is create a Sprite and add the TextField to that before adding the Sprite to the stage.
"But my mouse pointer still doesn't change when I hover over the text!?!"
Well that's because the Sprite you've created is empty apart from TextField and the TextField is still dealing with the MouseEvent.MOUSE_OVER by itself. We need to tell Flash that anything contained in the Sprite should be ignored in terms of what the mouse is doing.
That's where mouseChildren comes in.
sprite.mouseChildren = false;
... and your mouse pointer should now change when it's over the text.
