In order to use this, first make sure you have the Editor up and running properly. There are plentry of threads dealing with Editor problems.
I'm having the EXACT same problem as KuroiNeou. I followed up on some of the Editor threads (about 9 of them) and they all suggest changing the directory the Editor is trying to access in its settings file. I don't think this is the issue for me -- I have tried all available path options, including setting it manually to the FULL M&B path. It fixed the FIRST error, but now I get the second described error, plus lots of ambiguous "Could not load texture" error's, then file the third error and Runtime error.
I'm still searching the forums, but if you know of a fix to this, I would appreciate being directed to it or being told.
At this point it's like looking for a needle in a silver haystack.
Edit: There is reason to suspect that it somehow has something to do with Steam (although I don't understand why, if I'm pointing to the right directory). I'll test the theory by finding a non-Steam download of the game to test with, but the results of that may be a while.
My "cable" internet service clocks in at a whopping 4-5kb/s.
Edit: EDITED so that others who have this problem may benefit.
You must download the ORIGINAL version of Mount&Blade off the Taleworlds' website. It cannot be the Steam demo. Install it into a directory path that DOES NOT HAVE SPACES (I have no idea why that matters, but it does on my PC). I have mine installed in C:/Mount&Blade. Then, install Thorg's MapEditor INSIDE the Mount&Blade folder. It should now work perfectly.
Then you can use this tool. All is well.