> Examples: Why can't I comment  out a whole block  of code  at once?

You can. Just add the "Comment Block" and "Uncomment Block" function
to your menu or toolbar.

> Why can't I drag a variable  name into my watch window  instead of typing it
> in by hand?

Not drag and drop, but you can select the text of the variable (double
click) and then do "Quick Watch" or "Add Watch".

> Why is it so excruciatingly difficult to delete  empty rows?

I'm not sure what that means. Are you just talking about holding down
the shift key to select a number of rows and then hitting the delete
key? If so, that's pretty easy.

I'm using Excel SP2,
and it allows me to drag and drop variables into the watch window.

You CAN comment  out a whole block  of code  at once, however the command seems
to be missing from the menu (Excel 2003). Do a customise, and drag the
comment and uncomment icons onto the toolbar and/or the edit menu, or
wherever.

You CAN drag a variable  name on to the watch window  (at least you can in
2003). The other way to do a watch is to right click on the variable name
and select Add Watch.

I'm not sure what you mean by "excruciatingly difficult" when it comes to
deleting a line. However, if you mean that the line might have white-space
in it, then that's the auto indent. Actually, I just tried a hang-over from
old text editors - Ctrl-Y will delete  a non-empty or empty line.

I'm not aware of other Excel VBA editors out there, but there might be some.

For me, the VBE editor  is no worse than other editors I use, and does do
nice things like getting the capitalisation right on variables (after
they've been declared) and on key words, and also giving you immediate
visibility of missing keywords, and does also allow immediate compiles and
display of errors.

On the rare occasions that I need to do more complex actions on a module, I
drag it out to the file system and then use a language-sensitive text editor
or text file comparer on it, then overwrite the text back in the VBE. But
this is only worth doing when there is real value-add from the external
program.

List your other peeves with the VBE editor and we'll see if there are ways
of doing them.

You can, there is a button on the Edit toolbar.

Variable to Watch: You can.

Delete: It isn't.

Probably what you're missing is the Debug toolbar in your VBA editor
window.
(Right-click in the icon area and select "Debug".
The standard icons for this toolbar include those
for commenting and "un-commenting" selected rows (you just have to have
the type-in bar or any portion of the row selected)
as well as indenting and stepping through code  (which is REAL handy
instead of using debug.print and msgboxes)

To select the entire line to delete, move the mouse all the way to
the left of the line. The pointer changes to an arrow pointing to
the right (at least on mine). Selecting hightlights the line. Delete
or Backspace removes it.

As for drag and drop, you may have to turn it on from Tools-Options (in
the VBA editor).
Also, consider customizing you colors to help you read your code!

I think spending time with this editor  and "customizing" it where you
can will be much more valuable than exporting the code and importing it
before you can test it...