It only supports image preview. Its based on QTFile and that image preview ability was already built into the js for QTFile it isn't something I built and I don't expect to add text file editing to it in the near term so download/edit/upload is the way to go. You could always build a custom feature for editing txt files. mojoPortal doesn't use .txt files for anything so I have not implemented something for that and don't expect to as I'm focused on the things we do use and need. 

I'll have to look into the error with .html files and see if I can replicate it and solve it, but I suspect the browser is trying to open it directly since it is an extension handled by the web browser.

QTFile is just javascript and therefore just UI code, the upload is handled by server side code. Really it wasn't intended to use file manager to manage css files, probably you just need to add css as an allowed upload extension in web.config/user.config so that the server side code allows uploading. There is nothing broken nor needing update in the QTFile code that I know of at this point though I have not yet looked into the issue with .html files it doesn't sound like a javascript error.

You can copy the AllowedUploadFileExtensions setting from web.config into user.config and add any extensions that you want to be able to use.

Hope that helps,

Joe