Figured it out
The tutorial (Applying the Validation Show If Behavior - step 2) states "Highlight the region or text that you wish to display". While that is true, I could not highlight the text in the Dreamweaver's "Design" view because is DID NOT INCLUDE THE TAGS.
When I followed the server validation tutorial after highlighting the text AND TAGS in "Code" view, it went through without a problem.
Lesson: Highlight the entire string you wish to display INCLUDING the tags.