I'm not sure about this, but I think that highlighting is something your browser knows about, but the server doesn't. If so, the simple answer would be 'no'. (You can see a similar problem in that smileys always get inserted at the end of the text, no matter where the cursor is - if you decide you want a smiley at the end of a sentence you're revising, you have to cut&paste)
On the other hand, a button that added [ b]your bold text goes here[ /b] or something similar would be dead easy to provide.
I'm not sure I understand your point about it being visible to the server. I'm not suggesting it be updated at that end, I'm suggesting that when writing your post you can have the tags that you would normally type manually be put in for you.
I know another site where they implemented this exact feature, however I dont know whether they were using the same scripting language, so it may not be possible.
Come to think of it, I'm getting a sense of deja vu...have I brought this up before?