I like Programmers Notepad for simple text editing with syntax highlight. Lightweight and free. Susan (sottwell) likes Crimson Editor, which is just as good (although a tad slower).
Pat, the simplest solution for now is to just give your non html documents the suffix you wish them to have in the alias field. So you would rename the document "feed" to "feed.xml". Then you could refrence feed.xml and that would work (so would feed.xml.html but who cares?)
This should be fixed in the next release.