VIM is what I used in my LINUX classes, at the college. (Mainly under bash, but I like zsh a little better.)
VIM can be used in VI compatability mode, making it 100% VI-compatible.
You can edit the syntax highlighting, making it do what you want, and highlight the things you tell it to. Love that. There are lots of syntax highlighting rulesets bundled with it, however, and the rulesets change, depending on filetype.
Another really nice feature is Unlimited Undos. Not just one, like VI. Nice, for those late night sessions, where you accidentally leave the caps lock key on.
I like the color coding, makes it a lot easier to find misplaced tags. Also helps, when writing bash scripts, because it makes mistakes fairly obvious, as in a while/do fouled up, it'll color code everything afterwards the same as the loop would've been. (Yellow, I think it is.) All in all, it's a decent Psuedo-IDE.
I agree that the putty behavior is handy. I "think" I had putty for XP, as well, I'll have to poke around a bit.
About the only neat thing about Notepad is the fact that, under XP, you're not limited to 640K?, but to system memory. I once made a file 600 pages long, just to test that. Makes the system bog a bit.