Welcome to the Boards of Cloneoa, and it's project aiming to allow the creation of custom Klonoa levels!
You can edit and make levels one of two ways, through binary editing or using the engine's own level editor, enViSiONer. If you downloaded the game, you should already have it.
Like any MDI, go ahead and click File > New once it's launched. To start, you will see Klonoa. You can drag him anywhere, as he represents the starting point in your new level.
You will also see that you can change information about the level, including changing the theme (BG and FG) and it's music that plays, and the choice to also make an autoscroll level or hoverboard level.
"Objects" (as we call them) can easily be created and modified. Included with the program is a help file, which should be able to explain everything that the editor has, and can be accessed through Help > Guide.
[insert more stuff here when i actually start working ]
To see an advanced in depth analysis of level files, take a look at this thread documenting more manual level creation: here