Instructions
Right-click the Dr. Zed UED Patch zip file and select the "Extract to..." option. Extract the zip file's contents to the "C:\Program Files (x86)\2K Games\Gearbox Software\Borderlands" directory.
Double-click the "win7_fix.bat" file that was included in the zip file and follow the onscreen instructions to run the file and install the patch.
Right-click the "Borderlands.exe" file and select the "Create Shortcut" option to create a shortcut of the file.
Right-click the shortcut and select the "Properties" option. Add " -editor" after the text in the field labeled "Target." Click the "OK" button to save the changes.
Double-click the shortcut to launch the game in Unreal Editor mode. You can now create new levels, modify your characters and edit the game as you see fit.