I did try both PlainText and Nebulous Notes, along with Dropbox. It *is* a bit confusing how everything interacts. But the main problem is that these really are more like the Notes apps. For example, neither have an incremental search or a find function that I could see.
So I may, for the while, treat the iPad as a read-only device. GoodReader steadily improves and has a find function. And I'm certain there will be a reasonable editor (Textastic?) soon that can handle large files with search/find etc.
In the mean time, Dropbox+TextMate is way, way cool!
-- Owen