The question in the title of your post doesn't seem to match the question in your post.
I don't have an early version of OS X so, unfortunately, I cannot answer your question about "setting up" TextEdit on "Mac 10.3 or earlier" and be sure my answer is correct. In later versions, TextEdit saves in rtf (rich text) format by default or can be set in TextEdit/Preferences to save as txt format (plain text). Either should be readable on a Windows PC. I don't recall if Notepad on Windows reads rtf files, it certainly reads txt files. Microsoft Word should open either.