I am currently working on a project in Arabic and English, and I am viewing both languages, so I can provide you my experience :)
Answer to question 1: Any editor supporting UTF8 will do. Now I use both eclipse and notepad ++.
To configure eclipse using UTF8 (for some reason, not the default), go to the window menu → settings → general → workspace, then change the encoding of the text file with deault (cp1252) to another and select utf8, then restart eclipse.
For notepad ++, make sure you install supported locales, including Arabic. It is not checked during installation, and you must check the box to enable this feature.
Answer to question 2: It is absolutely wonderful to mix Arabic and English words together in a sentence. A very good article I found about what is written here http://www.w3.org/International/tutorials/bidi-xhtml/
This article describes design concepts for sites that support rights to left languages (including Arabic and Hebrew), with an emphasis on Arabic, because it is a more complex language, because some letters connect to others, and some do not.
Despite the fact that this article is about website design, it has a good amount of how to mix Arabic and English.
Greeso
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