Options > Active Edit
Try adding "Notepad" and see if that works.
You would need to know where the "Notepade" .exe file resides on your computer and then navigate to there in the "Active Edit" GUI
I just did it but, I use HTML KIT TOOLS .EXE file instead of "Notepad".
Configuring Active Edit (WS_FTP Professional)
The active edit feature allows you to edit remote files quickly and without having to actively transfer them first.
To configure an extension for active edit:
In the toolbar, click Options, then select Active Edit.
Click Add to add a new entry, or select one from the list and click Edit. The Active Edit Properties dialog appears.
Enter the extension or extensions separated by commas.
In the Editor box, select or enter the path to the application that you want to open the file in.
Click OK. The extensions appear on the list.
Using Active Edit (WS_FTP Professional)
The active edit feature allows you to edit remote files quickly and without having to actively transfer them before and after editing.
Once active edit has been configured for an extension, you can launch the file on the remote system.
To use active edit on a remote file:
Configure an editor and extension.
Select the file you want to edit.
Click Edit from the command bar, or right-mouse click on the file and select Operations > Edit.
The file launches in the associated application.
To display information about active edits:
Select the Active Edit Manager button on the toolbar. (This option is only available if the application is currently editing remote files).
To edit a local file:
Select the file you want to edit.
Click Edit from the command bar, or right-click on the file and select Open.
The file launches in the associated application.