TextEdit in Mountain Lion
Not a perfect solution (Btw, I too deselected "Documents & Data" in the iCloud prefs) but these approaches might help some folks irrespective of whether you use iCloud or not
Method 1. If you want to copy text (say from Safari) make sure the "New TextEdit Window Containing Selection" is active in the Services menu (In Safari, after selecting a block of text, click on the Safari menu, choose Services and search for "New TextEdit Window
") A new TextEdit window will open containing your copied selection. You can add Services in the System Preferences via the Keyboard pref. Click on the Keyboard Shortcuts tab and in the left pane choose Services and in the Text sub choose the above Service. Or alternatively click on the Finder menu > Services > Services prefs.
Method 2. Open a new TextEdit window and save the file as a blank (say in the Documents folder with the title Blank or whatever you like) and drag the Blank file to the Dock (to the right of the Application Divider) When you want to open TextEdit, instead of clicking the application icon in the Dock, just click the Blank document (in the Dock) and you're good to go (no intermediate window will pop up).
After a while the Blank document will show up in the Show Recents pop-up window when you right (control) click on the TextEdit application icon in the Dock and you can keep using it from there - unless you also suffer from the Show Recents bug that still hasn't been dealt with by Apple even in Mountain Lion.