A must-see if you want to extend Yo Frankie!, Chris Plush (blengine) made this tutorial explaining how to create a level from scratch, using the assets included on the DVD and available for download as well.
Download the original video (1024×768px) at vimeo, link is provided on the vimeo site (registered users only), if you already have it, feel free to upload it somewhere and share the link with us.
Videotutorial: Level Template Creation