No, that'll be a full featured level editor, like in Knytt Stories. For the new game, I'm going to try the same model as for Knytt Stories, easy level editing. The game + level editor will be free, so people can create and share levels without even having to buy the full game.
There'll be one special mode available for people who pay for the game, with some addon game mechanics that are going to be awesome, but the idea is to make the free part of the game spread and become at least as popular as Knytt Stories. Right now, my idea is that as a free user, you can play the game in two separate Knytt and WaDF modes, and play my own and third party Knytt and WaDF style levels. Then there'll be a third "mixed" mode where you combine the moves of both characters, and levels specifically designed for this mode. This mode is the most fun one to play, but you have to purchase the full version to play it
But, even as a free user, you still get a full size Knytt/WaDF type of game.