I think (and hope the rest of you guys can back me up on this) you need to play as many games as you can to define what good level design actually is, particularly games that are renowned for good level design such as GTA and an alltime favourite of mine DeusEX.
There’s loads of stuff on the web that explains good game design concepts, particularly on Gamasutra, GDC conference papers around the subject are definitely worth a read also.
In terms of engines theres loads: Unity, Unreal, Cryengine, Virtools, RAGE and many others…