I would prefer not letting members know about post editing for minor issues. Obviously the greater changes should be informed to members with notifications.
I only edit if they have links to other sites (Advertising) in the wrong area, or in regular posts. I don't tell them the first time if they continue to do so I give them a warning for it since it's against our rules.
Hm - I don't think we ever really need to edit posts otherwise. Usually I'll tell them if I edited anything else because it was usually to help them originally. 😛
If I ever edit anything I will PM them with the before and after copy and explain to them why it was edited. Generally if it's a link linking to somewhere it shouldn't etc. Or trying to get a referral link in a post.
I don't generally PM members if I edit a post of theirs (the small things such as spelling mistakes, ads or obvious spam) but if it's a potiential rule break, I would let them know the reasons behind the post editing.