There are two places and purposes when it comes to selecting a style sheet medium.
First, you can select a medium in the Stylesheet Editor when editing styles. You need to do this in order to let Flare know which medium your style settings should be applied to.
How to select a medium in the Stylesheet Editor
Click in the Medium drop-down list and select the appropriate medium.
Edit the styles for that medium as necessary.
Second, you can select a medium in the XML Editor when viewing and editing content.
How to select a medium in the XML Editor
In the local toolbar, click in the Medium drop-down list and select the appropriate medium.
The look of the content changes to reflect the style settings for that medium.
This feature is simply intended to show you how particular styles make a topic look. By using this feature, you are not telling Flare to use that medium for the output for that topic. The way to do that is to associate the medium with a target.
After you create a medium and/or set style properties for it, you need to associate it with a target. See Associating a Medium with a Target.