Saving "Bush hid the facts" in notepad

When saving the text "Bush hid the facts" in notepad under Windows XP, how come when you reopen it shows squares instead of the text?

I saw it in this video if you need an example

http://www.youtube.com/watch?v=9bK9-sc_uus&feature=related

This is due to a problem with the Win32 API function IsTextUnicode dating back to Windows NT 3.5. If a file is encoded in ANSI, the function will interpret it as UTF-16LE resulting in unreadable characters.

This fascinated me too back when I discovered it since I was kind of young and naive, I thought it was an actual conspiracy :)

There is actually a Wikipedia article on this you can find here.