I'm using the Mimemail module with the Simplenews module to theme an email newsletter, but it's not the least bit clear to me where I can store my styles so mimemail can then add them as inline styles to the various HTML tags. From my research I understand you can create a mail.css file where styles can be added or altered but that doesn't seem to be working for me. Am I missing something here?
I suggest you don't rely on stylesheets but rather create the inline code by hand and uncheck the option: Add stylesheets. If you find this difficult install emogrifier module (not sure but you might need to install htmlmail as well) that converts the stylesheet code to inline code.
I did myself an inline coding.
You might encounter an issue with weird characters breaking your lines in the email body, I am curious if this happens to you too, if so let me know. I think I have the fix for that too.
The mail.css file should live in the root of your current theme. In fact if you're using an external stylesheet then you need to do this to avoid a WSOD as you may hit this bug.