Celestine-
Aptana creates .htm files and it is also free. I use it and it comes highly recommended from the guy who wrote the html & css for dummies book. He also reviewed Kompozer and said it was good, but that he prefered Aptana.
As far as free webhosts, I ran across
doteasy the other day. They require that you buy a domain name from them, but they will host it for free. I did a little research about them, and they seemed like a viable option for free and no banner ads.