Now that notepad is 20+ years old I guess Microsoft decided to beef it up a little. XML Notepad 2007 is the new kid on the block and it is a nice little tool. I will probably keep on using XmlSpy and the BizTalk Editor for schema creation, but I'll give a go at using XML Notepad to create those pesky instance documents for test submissions to my orchestrations.
It allows inplace editing of the xml document, it seems to be aware of enumeration values (always nice) and gives you a dropdown to select. It also has date inputs which have always been on my wish list. It also seems to have XSL abilities which (maybe) I could use to test biztalk maps (not the ones with scripts of course) on the XML instances that I can whip up from this little tool
You can download XML Notepad 2007 here.