I will do my best to write a more thorough guide for using the cutscene editor this weekend, but I figured it might be good to explain the very basics.
To start creating a cutscene go to the top menu, and select "Create Cutscene" from the "Level" submenu. You will now see the cutscene editor instead of the level editor. The "NPC" tab should be pretty self explanatory, it works a lot like placing furniture. Choose a sprite for your NPC and then click in the grid to place it. It's a good idea to name your NPCs to make it easier to keep track of them if you wish to assign any actions to them.
Once you've set up your NPCs, head over to the "Frame" tab. You need to first place a trigger before being able to assign any actions. A trigger can either be an area which activates your cutscene once the player enters it. You can also assign triggers to NPCs so that clicking them or approaching them will trigger the cutscene (right click a NPC and choose the trigger action).
To create an area trigger, press the "Add Trigger" button in the "Frame" tab, it will become highlighted. After that click and drag to create a rectangular area which you want to use for triggering your cutscene.
With your trigger added, it's time to assign actions. You can either right click a character to add character specific actions, or press the "Add Action" button in the "Frame" tab. Most actions should be fairly self explanatory.
The actions you add are placed in a frame, and all actions in a frame will be executed simultaneously, and they must all be completed before the cutscene moves over to the next frame. So, let's say you want the player to walk up to an NPC and start a dialogue. First you right click the player and add a "Walk To" action, you then specify a path to the NPC. Then you add a new frame by clicking "Add Frame". After that you add the dialogue action. Finally you need to add a "Stop Sequence" action. The "Stop Sequence" action breaks the cutscene and returns control to the player, and it also has the option of triggering the "Level Clear" state. If you want to add further content to your cutscene you must then add a new trigger.
I hope this makes it a little bit more clear how the Cutscene Editor works.
Peace & Love
PS. A big thank you to everyone who's been using the Editor and been enthusiastic about it. It's been countless hours of hard (nightmarish) work, but you guys make it worth the effort.