Besides Notepad++ (which is great), Micro$oft's Wordpad, which comes with WinXP, works just fine. I use it all the time for these install.rdf fixes.
Notepad will work too, but if the install.rdf has only LFs (not CR+LFs), then the lines of text will all be smushed together, making it very challenging to edit! Wordpad handles text files with only LFs much better.
BTW, here's a trick I use: install 7-Zip, set up Wordpad (or Notepad++) as 7-Zip's default text editor, then use the "Open With" dialog to associate .xpi files with 7-Zip. Now you can open them by simply double-clicking, edit the install.rdf by clicking it and pressing F4, and when you close Wordpad and save your changes, 7-Zip will prompt you to update the install.rdf file inside your .xpi file automatically - no more need to extract, zip back up, and rename! Great time-saver.