Sensitive is probably not the right word, it uses whitespace to define scopes, and it therefore needs consistent whitespace to be able to distinguish scopes.
Notepad, usually, doesn't mess with whitespace (it's to simple for that), what it does do has to do with two characters, newline and cariage return. Some of the more advanced editors only use newline, and Python doesn't mind (it just sees newline and cr as new lines), but notepad requires for an "Enter" first a newline and then a cr (it's a Windows convention, Mac, for example, uses cr and then newline, unix it was just newline and practically every operating system has it's own conventions regarding these two characters). This means that if you open a python file with just newlines, and then save it, there is a big chance it will ignore the newlines (everything on one line), Python doesn't like that.