I use ultra-edit.
The webbased editor is fine on a server, installed on the local machine.
I have 3 copies of moodle on my local machine: a copy of the files on the productionserver, a local working version I use for tests or for demonstrationpurpose on places without internetconnection and an up to date copy op the CVS-repository, wich I use to translate on, but is not working. Maybe I should make this version also "alive", so I can use the web-based editor. It might solve the unix-dos file-problem also ?