|re: "and either I messed something up"|
That's would my guess, since I copied your AND formula directly from your post and it highlighted E7 just fine.
You are actually choosing a format color, aren't you?
Next, when you select E5:E10 and use =IF((AND(D7="A",E7="B")), TRUE, FALSE) then you will get results that look strange since the cells you are comparing won't line up with the cell that gets formatted. e.g. E5 will be have the CF applied if D7 and E7 match the criteria, E7 will be have the CF applied if D9 and E9 match the criteria. Check the CF formula for the individual cells to see what I mean.
By the way, these 2 formulas are essentially the same:
=IF(AND(D5="A",E5="B"), TRUE, FALSE)
By default, an AND function returns TRUE or FALSE, so you don't need the IF if all you want is TRUE or FALSE, which is all that CF needs.
One last check would be to put these formualas in their own cells and see if they return TRUE:
If they do, then the problem is definitely with your CF process, not with the data in the cells.
Click Here Before Posting Data or VBA Code ---> How To Post Data or Code.