Software and Indian language support
Many people looking for Indian language support for computers or even some people working on providing the support have a notion that Indian language support is a like providing a piece of software like word processor that works with Indian languages. This is a very incorrect understanding. Indian language user should have all the choice that an English speaking user has. All software should have Indian language support. As someone rightly said, "If a software does not support a language, it should be treated as a bug in that software". We should never build a software with the specific purpose of supporting Indian languages. We should work towards making all software have Indian language support. Similarly, we may build distro CDs for a particular purpose like demos etc. but we should never build a distro for "Indian language support". If there are 350 distros then we should have 350 distros with Indian language support. They should be seen as 350 ways to reach Indian langauge users.
sunthosh,
Here is my favorite multilinugual editor: gedit. It has near perfect rendering for almost all major scripts in the world. Do you need ITRANS or will any phonetic notation will do? If a phonetic notation will do, see my article on setting up keyboard to install RTS or WX keyboards. If you need only ITRANS you may prepare one easily using the scripts in the above package.
Infact, most editors in GNOME will have this multilingual capability. For example, I write Indic text in sticky notes, evolution mail client etc.