I used it back in my Windows days. Out of the box, I think it's the only way to do rich text on Windows. Also (used to be anyway) one of the less resource intensive options.
You know, for when you've got Napster, Winamp (with visualisation), ICQ, and MSN all up and barely running. You don't want to have to run, like, WordPerfect at the same time! Your MP3s will start skipping :p
They created WordPad because of antitrust issues and never changed it. Try opening a Word document created by a recent version, it's pretty useless today.
Notepad rules though, it even got UTF8 support recently-ish! /s