I wrote a fancy editor but first i used stencil maps to build the meshes. However, there are several methods, some are shader driven using only one mesh others draw the terrain several times. I was developing with a AMD K2 350MHz and a TNT2 so i had to optimize a lot, drawing the mesh more than once was not possible so i had to cut out invisible parts of the layers/meshes.
Multilayer terrain only means that you usually draw the terrain several times or in layers instead of stretching or tiling one texture over the whole mesh. You can use stencils, alphas, shaders or meshes to render the layers. This really depends on what you try to do.
You may also take a look at Megatexturing and you will probably need quadtree culling.
If you need a editor depends mostly on how many terrains, levels, worlds you want to create, you hopefully do not try to make a MMORPG so i guess you dont need a editor.
Here is a image of my multi-layer terrain and world editor, was probably a waste of time (except for learning purpose):
http://www.pasteall.org/pic/543Edit: Here is also a video of the "game"...:
http://www.youtube.com/watch?v=Xe0DCrOG0WQ