_Any_ text editor that can open and save UTF-8/UTF-8 signature encoded files properly (along with ANSI, etc.) is "
the way to go for editing LUA and XML".
Windows Notepad "can save" UTF-8 files, but its a giant hassle to work with. It can destroy files that originally have Unix or Mac newlines, below Vista it has problems with detecting Unicode, it has no line numbering, etc.. So basically, anything is better than it.
Notepad++ is well regarded as its open source (free) and has a ton of features,
plugins and so on. Also nice for LUA editing as it has plugins that can highlight, etc..
But as noted, its got a giant ton of features. Also has a good built-in help file along with tons of online resource help. If its too much for you, might want to ask if LUA editing/programming is really something you want to start doing.
If you really (really) do want to program, a lighter weight text editor mentioned above that is actually my favorite for quick work:
Notepad2 (also free). It has line numbers, doesn't add "random blank lines" and is considerably simpler to get started with.
Other choices:
Lua editors.