I have just recently downloaded Lite-C. The package was supposed to include SED, MED, and WED. When I open the script editor and click on 'tools', there is a button that says WED. But when I click on it, nothing happens. I tried clicking on MED and that works, so I'm assuming WED isn't downloaded. If this is the case, where can I download WED? And if not, what do I do?

This is no real wed, it won´t work. You have to buy the Extra, Com or Pro edition to use WED.

How do I design my levels then?

Only with models(which isn´t easy!)

Or you have to buy it - this is better

Or use 3d world studio,GTKRaniant and I think free world can be used.