SSH + Vi or Emacs works great🙂
On Win32, EditPlus has a built-in ftp routine which will load and save files from your ftp acount. This maybe what you're thinking of, but it's essentially the same as downloading the files with an ftp client, editting them locally, then re-upping them.
The only real way to edit files directly a remote server is via SSH, Telnet, or VNC. It's unlikely a host will give you VNC and I personally wouldn't trust a host which allows for telnet access.... way too insecure and easily hacked. That loops us back to line 1 of this post.........
geoff