Wow, nobody mentioned Notepad++. Consider it mentioned. I do all my html/php in this, and have since I first heard of it. Notepad++ is free, has great syntax highlighting, and allows the code structure to be minimized. Like everything inside head tags or in a foreach loop can be closed to one line, so you are only seeing what you are editing.
I have Dreamweaver MX and used it for a little while, but to me it is way too much. Too much power. I prefer just hand coding with good highlighting so you can see when you screw up and navigate the code easily. Using Notepad++ also removes formatting problems like adding extra line breaks.
Notepad++