A:link { text-decoration: underline; color:#153303; font-weight: bold;}
A:visited { text-decoration: underline; color:#153303; font-weight: bold;}
A:active { text-decoration: underline; color:#153303; font-weight: bold;}
A:hover { text-decoration: none; color:#348005; font-weight: bold;}


h1 {font-family: arial;
color: #153303;
font-size: 14pt;
font-weight: bold;
margin-bottom: 5px;
margin-top: 5px;
line-height: 14.9pt;}

b {font-family: arial;
color:#153303;
font-size: 8.5pt;
letter-spacing: .1pt;}


body

{background: #E8FFA5;
background-image: url(middlebackground.jpg);
background-repeat: repeat;
{
scrollbar-face-color : #ffffff;
scrollbar-highlight-color : #ffffff;
scrollbar-3dlight-color : #ffffff;
scrollbar-shadow-color : #000000;
scrollbar-darkshadow-color : #000000;
scrollbar-track-color : #ffffff;
scrollbar-arrow-color : #000000;

{font-family: arial;
color: #000000;
font-size: 8.5pt;
font-weight: normal;
line-height: 12pt;}



When I change the size of bold text, both browsers change the size, but when I change the size of normal text, only IE shows the updated font size.

You have some extra { in your body tag. Try this:

body
{ background: #E8FFA5;
background-image: url(middlebackground.jpg) ;
background-repeat: repeat;
scrollbar-face-color : #ffffff;
scrollbar-highlight-color : #ffffff;
scrollbar-3dlight-color : #ffffff;
scrollbar-shadow-color : #000000;
scrollbar-darkshadow-color : #000000;
scrollbar-track-color : #ffffff;
scrollbar-arrow-color : #000000;
font-family: arial;
color: #000000;
font-size: 8.5pt;
font-weight: normal;
line-height: 12pt; }