Notepad is OK, but if you want a text only editor I prefer Notepad++ it's very easy to use, has syntax highlighting and lots more very useful features that plain old windows Notepad doesn't have.
DW of course benefits from autocomplete and drop down lists and such which can help a novice who half knows what he wants but can't remember the exact code to accomplish it.
For free templates I recommend www.oswd.org (open source web design, in case I got the URL wrong).
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