The free Torchlight Editor is now available for download by enterprising modders.
Download the Torchlight Editor from filefront
In order to use the editor, you'll also need to have Microsoft's .NET framework installed. If you don't have .NET (or don't know if you have it) you can download and install it from the following link:
Tips for making mods can also be found here in the Torchlight forums. And as Torchlight mods become available, you'll be able to get them from the Original Torchlight Fansite, where they will be hosted.
All graphics provided by Runic Games.