How do I edit text files in the Windows command prompt?

The simplest solution on all versions of Windows is:

C:\> notepad somefile.txt

And, no extra software required.

edit filename

I won't vouch for its functionality and outdated GUI but it is installed by default, even on Windows 7.

Edit: Except 64 bit versions of Windows.

From a Windows command prompt enter copy con followed by the target file name. (copy con c:\file.txt).

Then enter the text you want to put in the file.

End and save the file by pressing CTRL-Z then Enter or F6 then Enter.

If you want to change text in an existing file simply display the text by using the command type followed by the file name and then just copy and paste the text in to the copy con command.