TinyMCE is the default text editor in Joomla 1.7.
By default not all the TinyMCE tools are enabled.
To enable all TinyMCE tools got to the Plugin Manager and search for the Editor - TinyMCE Plugin.
Click the Plugin name to open the settings.
In Basic Options set Functionality to Extended.
Save the Plugin and make sure the Plugin is enabled.
Now there should be more tools available above the Text editor in Article edit.