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ViImproved (VIM) is an improved version of the editor "vi", one of the standard text editors on UNIX systems. It has all the features you'll ever need from an editor, and probably three times that many more that you'll never use The newer versions also include a 'vimdiff' mode that you can use to diff and merge file(s). Oh, I didn't mention it's also scriptable in Python, and there's a graphical version: GVIM. Get it from http://www.vim.org/.
VIM is also available in your favourite OS. The new version 6.0 has folding. Folding makes your life easy when you have some long files. By the way, JedIt also has folding.
You can download many scripts and learn new tips from the site http://vim.sourceforge.net