New Update as of 9-17-09... You can post ANY overworld questions you have here. Seriously. Now that my computer (Which had the ALOMOST FINISHED ENTIRE DOCUMENT) died, I have WAY more free time than I should. If any newbies have any overworld questions beyond this after reading this guide, Feel free to post them here to keep this subforum from overflowing...
Hello One and All! Since I've seen that a lot of people have been having Overworld problems, and that many of the Overworld guides go pretty in-depth, I have decided to make an overworld editing tutorial. This tutorial has pictures to guide you along the way, along with some excellent recommendations as to where to find other guides to overworld design.
For Now though, The Layer 2 section is a little rough and imcomplete. I'm working on it though!
-Table of Contents-
1 - Starting out
-Explains how to get into the Overworld Editor, how to find things on the screen, and how to acess the Editors.
2 - The Toolbar
-Explains everything on your toolbar, and has pictures to show what things look like.
3 - Making Mario move differently in the Title Screen
-Explains how to insert your own custom movements in the title screen.
4 - Title Screen and Credits
-Demonstrate how to acess the Title Screen and the Credits.
-Shows how the Title Screen and Credits may be changed.
5 - Layer 2 (Basic) Editing
-Explains the 8x8 editor (and how to use it).
-Tips on Overworld Design
-Example Overworld included
6 - Layer 2 (Advanced) Editing
-Explains Sub Maps and Main Maps
-Explains Palletes
-Explains how to avoid Cutoffness
7 - Layer 1 (Paths and Levels) Editing
-Explains acessing the 16x16 editor
-Has a Step-by-step Tutorial on how to place paths and levels
-Explains the differences between path tiles
8 - Layer 1 (The Intricacies) Editing
-Explains how to Set up Pipes and Exits
-Explains how to commingle your Layer 1 and 2
9 - Layer 2 Events
-Explains how to delete Layer 2 events
-Explains where to make your own Layer 2 events
10- F.A.Q. (Frequently Asked Questions)
11- Links
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1 - Starting out
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Alright. Assuming that you know how to get into Lunar Magic, Open up your ROM.
To acess the Overworld Editing Menu, You can either...
A) Click on the Picture of a Castle
B) Go to "Editors" and then scroll to the "Overworld Editor Window" Option.
If you are intent on using the picture (The quicker option), this is what the picture looks like;

Alright! Now we're in the Overworld Editor! That wasn't so hard, now was it?
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2 - The Toolbar
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From this point on, the toolbar is your friend. If you have no idea what I am talking about, then please scan the upper areas of your Overworld Editor Screen. If you do, You'll come across this picture...


...Now, All of those buttons can be divided into groups, each group seperated by the function it does. Here is an Example.

In the Above Picture, The First Group consists of the first two buttons from the left. We'll be calling this group the "DO NOT TOUCH UNLESS YOU ARE CERTAIN" Group, or the "DNT" group. We call this the DNT group because the two buttons are the most powerful buttons on the entire Overworld Editing Window. The First Button reloads everything from the last time you save. The second button Saves any changes you have made, and writes the changes to the ROM.

For instance, Say that you change the Overworld. If you press the Save button, your changes will be saved. However, if you change something, and press the reload button, then your Overworld will revert back to the state it was in before you changed it.
\../
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The Second group in the picture is the "Editor" section. The Editors are used to edit various parts of your Overworld. Here is a picture of what it looks like...

The very First button on the left is the Layer 1 editor. The Layer 1 editor manages the levels and buildings used on the Overworld. Additionally, the Layer 1 editor is responsible for events, and allowing Mario to travel from one level to another.
The Second button to the left is the Layer 1 Events editor. Simply put, the Layer 1 events editor is responsible for changing Layer 1 tiles.
The Middle Button (The one with a Hill on it) Is the Layer 2 Editor. the Layer 2 editor is responsible for creating the Bulk of your Overworld. The Layer 2 Editor makes all of the water, land, hills, mountains, rivers, lakes, and empty space via the 8x8 Editor (which will be explained later). The Pieces of land that are used by the 8x8 editor and Layer 2 all respond to different palletes. This means that you can not only make your map, but that you may also different colors on it!
The second button from the right is the Layer 2 event editor. This button looks like the Layer 2 Hill, but it has a flash, or a star on it. Simply Put, the Layer 2 event editor is responsible for all of the changes throughout your Overworld that involve Layer 2.
The Final button on the Right (with the picture of the Lakitu in the cloud) is the Sprite Editor. Now, The sprite editor functions a little differently than the other editors. The Sprite editor is instead a drop down list of all of the different sprites you can have on your Overworld, such as Boos, Jumping Cheep-Cheeps, Lakitus. Blue birds, Pihrahna plants, and the smoke from Yoshi's House. you can choose a sprite to put into the game, or change a sprite by selecting one from one of the many drop-down windows.
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The Third group that we are being introduced to is the "Tool" group. the Tool group is composed of the 8x8 Layer 2 Editor, The 16x16 Layer 1 editor, and the Layer 2 event tile selector...


The First Tool we are being introduced to is the Layer 2 8x8 editor. As mentioned earlier, this is the tool that you will be usuing to build most of your Overworld with. The Layer 2 8x8 Editor can only be used when you are currently on Layer 2, by the way. When you have clicked on the icon displayed, you will get this screen...

...Which is essentially the editor. From here, you may choose what piece to insert, or even what pallete to use for a specific piece.
The next Tool we are exposed too is the Layer 1 16x16 editor. The 16x16 editor is mainly responsible for any levels we might want to put in, and also any paths we want to put in. The layer 1 16x16 Editor mode also comes with moving clous, fortresses, castles, Yoshi's house, pipes/stars, and screen exits...

To see the Paths available on the 16x16 editor, you can...
A) Press the "9" button on your keyboard
B) Click on the "Display Layer 1 Mario Paths" button on your toolbar
C) Go into the View area at the top of your screen, and select it.

When you go back into the 16x16 editor, you should see this...

...Which now shows you what paths you have.
The Final Tool is the "Layer 2 event Tile selector". The Event tile selector allows you to see the transformation of various Layer 2 tiles as levels (events) are passed.
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The Fourth Group (In the green box) is essentially the miscellaneous group. That being said because the group is composed of the Pallete editor, The Animation option, and the Layer 1 Mario paths Option.

The Pallete editor is what you want to go into if you wish to change the colors the Overworld uses. Mind you, the color change is not always a good thing, but nice ideas can come out of it. Because of the Pallete editor, ice or cloud themed worlds are not longer a wish from the past.
The middle button is the "View animation option". By pressing this button, you will be able to see what your Overworld will look like when playing your hack. In other words, everything becomes animated, such as rivers and lakes.
The button to the right gives you the option of viewing Mario's paths on layer 1. As said earlier, you could also just press the "9" button on your keyboard to get the same effect. If you press this button while on layer 2, you will still see the paths.
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We at Team 5 Star like to call the buttons in the Purple Box the "Layer 1 Helpers". We call them this because that is what they do: They help you out when editing Layer 1.

The First button on the Left is a picture of a level with only one exit (It's yellow). This is called "Initial Standard Layer 1 Tile Settings". This button lets you take a look at the intricacies of a level, allowing you to do thing such as:
1)Choose which level to use for a tile
2)Choose which direction one can go
3)Choose whether or not someone can save after beating a level
4)Allow or Disallow acess to a level after it has been compelted (A la Castles and Switch Palaces)

The Second Button to the left is the "Destroy Tile Settings". The Destroy Tile Settings button, when used correctly, allows either a Castle, fortress, or Switch Palace...

...to implode upon itself after the player has beaten it. This feature uses events that directly correspond with the event set to be triggered after a level has been beaten.
The Exit Tile Level Settings, or the picture of the Red Bridge, is one of the buttons responsible for allowing Mario to travel from one Submap to another. You see, each exit tile (A red Mario Path), is assigned a number. If you want Mario to be able to travel between submaps, then you must first enter in what number exit #1 will be using. Then, at the box asking for a destination, you must put in what exit you want to go to. Do this for the other exit as well. Now, if both exits are connected to each other, then Mario should not have a problem with travelling!

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11- Links
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A Basic tutorial at SMW Wiki can be found here:
http://wiki.smwcentral.net/wiki/Tutorial:Basic_overworld_editing
This is a great place to get help:
http://www.smwcentral.net/?p=forum&id=5
For General Tips:
http://www.smwcentral.net/?p=thread&id=8965