XML Notepad validates your document while you are editing and shows any errors or warnings in the Error List panel. You can double click those errors to navigate to the node in error so you can then fix it.

XSD Schemas are located using the standard xsi:schemaLocation and xsi:noNamespaceSchemaLocation attributes where the xsi prefix is bound to the namespace or you can specify schemas using the Schema Dialog.

Once a schema is associated with your document you will also get prompted by Intellisense for element and attribute names and values.