Ok, First of all, you need to change the formula in C1 to

=ABS(A1-B1)

This turns the negative value into a positive value so that it displays correctly.

Next select column C (the entire column, by clicking the column letter at the top).

Go to the 'Home' tab on the ribbon, then click 'Conditional Formatting' followed by 'New Rule'

In the top part of the pop-up box, click 'Use a formula to determine which cells to format'

You should then see another box labelled 'Format values where this formula is true:' in this box, enter the formula =$A1<$B1 (don't press enter).

Click the 'format' button, then click the 'Number' tab on the new pop-up window.

Click 'Custom'

In the box under 'Type' delete the existing content, then enter the custom format "-"[h]:mm

Click the 'OK' buttons until you get back to excel.

Hopefully I haven't missed a step anywhere.