Full Word Processing
First off, there is a serious set of formatting controls tucked away in the menu bar, but you may need to turn it on. In the image below, I have a TextEdit document setup to be a “Plain Text” file. Note the Serif font and the lack of any kind of formatting options. It's all pretty ugly, but TextEdit can do us better.
Here's a plain text TextEdit window. Not very exciting. But…
If the image above is what you see in TextEdit, go to Format > Make Rich Text. Boom! You suddenly have a full range of advanced formatting options at your fingerprints, as shown below. You can control the font, the size, and the style. There are also font color and background color options, as well as bold, italics, and underline. Lastly, you can align text as needed, set the line spacing, and access a wide variety of bullet point options.
…switch to Rich Text and look at all those options!
This gives you all the controls of other word processing apps all right there in TextEdit, with no additional installation or compatibility issues.
You can toggle a document back and forth between Make Plain Text and Make Rich Text, but once you go to Plain Text, your formatting is lost unless you Edit > Undo (Command-Z) back out of the change.
Bonus Tip: while we're discussing other word processing apps, you can use TextEdit to open or save Microsoft Word files. If you don't have Office installed, or just need to make a quick edit, right-click a .doc or .docx file and you can select TextEdit as the app to use. You can also drag a .doc or .docx file onto the TextEdit icon.
Paste and match style
This is a common issue between virtually any two apps: You copy text from one, and then you paste it into the other and the fonts are all different kinds and sizes, so now everything looks weird. There's an easy way to get around that in TextEdit: Paste and match style. Use Command-Option-Shift-V (or the command from the Edit menu) and your pasted text will take on all the properties of the document you're pasting into, giving you consistency. Even if you don't necessarily use the match style part, having TextEdit already installed makes it a good troubleshooting tool if you have a bit of text that's giving you trouble.
Note: Paste and Match Style is a feature supported in some other apps, too. Mail.app springs to mind.
Save Web Pages
You can create a local copy of a webpage, images and all, using TextEdit. Load up the webpage you want in Safari, go to Edit > Select All (Command-A), then Edit > Copy (Command-C). Head over to TextEdit and choose Edit > Paste (Command-P) and all the text, layout, and images will paste in at once.
Note that some formatting may be off, as shown in the image below. That's because TextEdit doesn't have access to the remote style sheet Safari pulls from. But if you want to grab something from the Web fast, this is an easy way to do so.
An image of TMO on TMO? Inception!
Whether these tips are new or just reminders, you might want to take another look at TextEdit and what it can do for you. Odds are good it is a lot more than you think.