Usability improvement in this area should definitely be at the top of the developer's list. The lines of code that open in Notepad are not a pretty sight if you're not familiar with HTML but with a tiny bit of help from a friend and/or this tutorial you should be able to remove the unwanted items. To delete items, go to the File menu and choose Edit Favorites.
When you've found a station and you'd like to add it to your favorites, simply go to the Favorites menu and select Add to Favorites.