I’ve used level editors before, and I must say,
The Settlers III Level Editor is a very good editor. It's easy to use, and allows for complete customization of missions, from goal objectives, to location and availability of resources, to assignment of teams, to creation of landmass; from the smallest detail to the largest. You can even test out your levels by viewing them as they would be seen in gameplay prior to creating the finalized game scenario file. Then, when the mission is finalized, you can share it with others on the net or via e-mail. Create an impossibly hard mission and challenge that friend of yours to solve it... you know - the one who thinks he's so much better at strategy games than you are.
Installation: The Settlers III Mission Pack installs easily and meshes seamlessly with The Settlers 3. Just put in the disc, and follow the instructions. Piece -o- cake.