Notepad2 is free and it has replaced notepad on my machines a long time ago. It has some really useful features:
Syntax highlighting for html, xml and most programming languages
CR+LF vs LF encoding management so there is no problem editing unix files on Windows
Auto close XML tags
Tons for keyboard shortcuts
The best thing of them all; it is a single .exe that you copy. No need to run any setup. Just copy it on a USB Key and you have it wherever you go!