Could anyone point out why this is not working in Mathematica 8:
DynamicModule[{x = Pink},
Row[
{Style["Hello", x],
Mouseover[
x = Green; "World",
x = Blue; "World"]}]]
What I expect is to see the color of "Hello" change when I mouse over "World". What I am getting is a pink "Hello" that never changes color.

A quick check shows that
Mouseoverevaluates all the expressions inside of it when you first launch it:The idiomatic way of actually making the
Mouseovermodify the values of x is to useMouseAnnotation. Mr. Wizard's answer describes how to achieve this.