er... XP and Win 2K I think have the "Open With" choice directly in the right click context menu.
If not in Win 2K, or you're using Win 98 (why?!), keeping shift pressed while right clicking guarantees you the "Open With" choice. then you can choose notepad BUT also checkmark "always use this program to open this type of file". I assume the HOSTS file (whatever it is) has some sort of an extension?
I find it rather odd you dont have Notepad in your program listing...