Here's how "the pros" at Microsoft do it:
MS Word uses the piece table data structure. An ascending array of character positions is maintained in parallel with an array of larger structures that contain pointers into either the original file (text loaded on file load) or into an append-only buffer of newly added characters.
The EDIT control used everywhere in Windows uses no data structure at all. Notepad simply uses a multi-line EDIT control. Check it out with a heap viewer. The EDIT control maintains only a buffer of line-breaks and tab-stops.
If you're going to create a simple non-formatted text editor in Windows, you could easily subclass the EDIT control to add features.
