I decided to explain this first, since it makes the following steps easier if you know this.
First of all, each level has one or more Areas. These areas are completely independent, but you can freely go between them by using Entrances (see page 3).
Even though all areas can be different, they still have some things in common, like the Time (The time is for the level, not just one area).
Let's first go to Area options, by clicking the Box icon at the top (right next to "layer 2"). You can also find the option under "Settings".
Under the Tilesets Tab, you can choose the overall Theme of your Tiles. Every one of the drop down boxes corresponds to one of the 4 first tabs in the palette (to the right). You can change them freely to anything you want. Only the Standard Suite is Required.
Under the settings Tab, you can change the Time you get to finish the level.
You can also change the default entrance ID, but thats for later on.
If you want to have Edge Wrapping (when you walk of left, you re-appear at the right and vice versa), you can enable that here too.
Events might be handled later on.
If you want to add a new Area, go to settings and choose "Add new Area" (or "Import Area"). You can then go back to area options and change the Theme if needed.
You can have up to 4 Areas per level.
Every Area can be divided even more into different Zones. A Zone is the Range of Visibility (you will never see anything on the screen that's outside the Zone). When you are at the end of the zone, the screen will simply stop moving.
Depending on how your character leaves a Zone, different things will happen:
Top: Nothing happens (can be used for secret passages).
Bottom: You die (aka Bottomless pit).
Left/Right: You walk agains an invisible wall (or you re-appear at the other side if Edge wrapping is Enabled).
Generally, different Zones are used to have multiple independent parts of the Level in the same Area. (Remember: we can only have 4 of them!).
They can be used for other purposes if needed.
The Icon right to the Area options will bring you to the Zone options. (Or use the Settings menu).
You can enter exact Coordinates and Width/Height here, but you can manually resize them afterwards too if needed.
There are a lot of options here. Here are the most important ones:
Zoom Level: Zoom in (negative) or out (positive).
Zone Theme: You can give each zone a different theme.
Normal / Layer 0 Spotlight / Full Darkness: Normal will do nothing (WYSIWYG), Layer 0 Spotlight will draw a circle of visibility around you when you go behind layer 0 tiles and Full Darkness will make the room dark, with a small visibility circle around you.
Bounds: Adjust how fast the camera reacts when you move towards the edge of the screen.
Audio: The music that plays in this Specific Zone.
You can make up to 8 Zones per Area, but this is not recommended (usually 3-4 is enough).
Before we can change our backgrounds, we'll need to create a Zone first (since each background belongs to a Zone).
When you have some Zones, Click the button right to the Zone options (or use the Settings menu).
Not much can be said about these options, everything does what it says :P