Are the tools legal? What exactly is the name I should be looking for?

I have designed 3D levels before for a freeware game, but it had a very simplistic engine. I know what level design is. I haven't modelled complex 3D geometry, though.

And my other question was - how would you make the character collide with the environment in third person (climb over boxes for example, instead of jumping on them).

good question, i think if you're talking about a mod, you just add a little code to perform an animation, like you would if you press a button on the wall, an animation and a function is carried out. the only difference is that the animation in this case is being carried out by the person instead of the environment, i don't see much trouble in making it work, although you do have a good point. i don't know the engine, or code of any kind really, i'm just looking at it logically...

Unfortunatly, Source engine is the one I'm most familiar with, but even so I have very little experience with it's general SDK. I don't know how to code anything in Source, I assume it's all done in C++. Unfortunatly, because of this I have no clue as for what kind of work would be needed to accomplish a 3rd person mod.