More o' Wind from Todd Howard
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GS: Have you made any recent changes to the game editor?
TH: We changed the way landscape worked a while back to make it faster to create, and it's pretty amazing. You can create a landscape as fast as you can think it up almost. We've added the "path grids" for AI, so you can generate AI routes for NPCs and creatures to use. Lights have been updated. Our most recent addition is "leveled creatures" and "leveled items." This allows you to define a set of creatures and items and place them down. They randomize themselves based on the player's level. This allows us to create a dungeon and have it randomize some of the items and creatures in it to better balance the game. So you could make a "leveled long sword" and drop it on an NPC, and depending on how good the PC is, the NPC will have a better weapon.
Sounds similar to what Neverwinter Nights is doing...