This is how I edit the levels at the moment:
http://i.imgur.com/W5yVH.jpg
I have a set of j3o files (“Markers” folder) that only contain pre made Nodes with UserData that I then “Add to SceneComposerA plugin in the jMonkeyEngine3 SDK, allows editing the content of j3o files which represent a complete scene or model.” after selecting the “Markers” Node and right-clicking on the terrain where I want it. This way I place these markers that the game later uses to place villages and people etc.:
