There's a copy of Notepad in %windir%\notepad.exe and another in %windir%\system32\notepad.exe. Why two?

Notepad is perhaps the most commonly hardcoded program in Windows. many Setup programs use it to view the Readme file, and you can use your imagination to come up with other places where a program or batch file or printed instructions will hard-code the path to Notepad.

In order to be compatible with programs designed for Windows 95, there needs to be a copy of Notepad in the Windows directory. And in order to be compatible with programs designed for Windows NT, there also needs to be a copy in the System32 directory.

And now that Notepad exists in both places, new programs have a choice of Notepads, and since there is no clear winner, half of them will choose the one in the Windows directory and half will choose the one in the System32 directory, thereby ensuring the continued existence of two copies of Notepad for years to come.