I recommend downloading TextPad. You can get it free here:
It's basically a Notepad and Word hybrid. It's more functional than Notepad but not as fancy and distracting as Word. However, I use it for two main reasons:
This dialogue file
- It has excellent line alignment
- It has numbered lines
was created using TextPad. Unfortunately Firefox doesn't offer WordWrap (that I know of) but if you go up to Save Page As... I believe, you can save it as a text file and turn on WordWrap in Notepad or TextPad if you've downloaded it already. You can see the nice and neat formatting. That also provides an example for you of how I format my 'scripts'.
Here's a PDF version
that I've included in my portfolio for easier reading.
Really it's going to come down to project specifics and necessity. I format my dialogue files this way because in the end I have to put them into the Electron Toolset and it's easiest for me to do that when I can see, at a glance, what nodes go where. But my tips are to keep it clean, keep it aligned, and keep it easy to follow.