I've found that there aren't a whole lot of good freebies any more, which is a shame. As a professional .Net developer I do tend to use Visual Studio and there is a free Express Edition which you could use, however there are some limitations. You cannot:
Create an XML schema from an XML instance document.
View XSLT output from the XML Editor.
No smart validation while editing XSLT style sheets.
No XML Schema Explorer.
These may be deal breakers for you, or maybe not, however good and full-featured xml editors are hard to come by gratis these days: Most of the good ones have been bought, like XMLPad (now a paid for app) and a whole host of others.
I haven't tried it yet but there is one free editor I found called XML Copy Editor which is free and seems to be a current project. I am about to try it myself since I'd like something more lightweight than Visual Studio.
One slightly leftfield option might be XML Notepad 2007. This is still available from MS and Codeplex for free but it is looking a little dated and hasn't been touched since 2007 so may have bugs or fewer/older version of features you'd like.