The enemy editor is arguably the most powerful component in PK Hack.  It's certainly the most extensive.  Here you can access all aspects of an enemy, including stats, items, attacks, and even behavior in the normal game world!  There are three main screens (Stats, Actions, and GFX/Sound), each of which is documented in detail here.
 
STATS WINDOW
Binoculars: Search for a specific Enemy name.  It's case-sensitive, so be exact.
123 Button: Sort enemies by location in the ROM.
ABC Button: Sort enemies alphabetically.
Arrow Button: Sort enemies by the general order you'll meet them in the game.
Enemy:  This is the dropdown list of all enemies that you select from.
Name: Two things - don't put the word "the" at the beginning, the game will do it for you.  Second, don't make it too long.  Either one of those can make it look all funky.  Also remember, the | (Shift - \) character is equal to Ness's name!  That's how they got the name "Ness's Nightmare."
HP: Hit Points (If you don't know what hit points are, go play an RPG and don't come back until you figure it out.)
PP: Power Points (You know, for PSI.)
Exp: How much you earn for defeating it.
Money: How much you earn for defeating it.
Speed: The game uses speed to determine order of battle and (supposedly) how often the enemy will miss you.
Offense: Determines how much damage you do (compared to enemy defense).
Defense: Determines how much damage you take (compared to enemy offense).
Status: This is how the enemy starts off at the beginning of battle.  Unfortunately, the Devil's Machine's shield is not set in this window.  The list of valid arguments is below.

     1 = PSI Shield a
     2 = PSI Shield b
     3 = Shield a
     4 = Shield b
    5 =Asleep
     6 = Can't concentrate
     7 = Brainshocked

Level: Level, I believe, has something to do with the outer world and how likely they are to run away from you.
Guts: Determines the rate of smash attacks and how well you can survive mortal damage.
IQ: Offensive modifier for PSI Powers.
'The' Flag: Whether the enemy will be referred to as "(Name)" or "The (Name)."
Item: What item this enemy can drop at the end of battle.
Item freq: The odds that the enemy will have that item.
Miss Rate: Can be anywhere from 0 to 255.  Changes how often the enemy will hit you. (0, always; 255, never)
Type: Normal, Insect, or Metal.  Some items, like the Rust promoter, are able to affect one of these groups.

Apply Changes: Exactly what it says.  You have to apply changes before you switch to a new enemy or your work will be lost.  However, you can switch between the different screens without applying your changes.

Actions: This is a list of attacks that the enemy can use.  One thing to note is the Enemy Extender attack, which will allow the enemy to switch to the action list from another enemy slot (pick the slot in the Arguments window.)
Arguments: For PSI attacks, items, and the Enemy Extender, this slot is used to pick what it says the enemy is doing in battle.  You could have an enemy say it's doing PSI Lifeup, when in reality it's trying PSI Starstorm.  Or, you could have it say the enemy was about to use a Super Bomb, which suddenly starts playing "Ode to Orange Kid" like the Suporma.  The Enemy Extender is explained above.
Order: In what order the enemy uses those attacks.  They're mostly self-explanatory, but the Staggered Order (just so you know) goes something like "3, 4, 3, 4, 3, 4, 3, 1, 2, 1, 2..."
Final Action: What the enemy does when they die.
Start Text: The address the enemy links to for messages like "The Black Antoid blocked the way!"
Death Text: The address the enemy links to for messages like "The Coil Snake became tame!"
   The above two windows use the SNES addresses in the game.  For more info about the pointers, check out the n00b guide and the EBTE section.
Max Call: A range from 0 to 8 to indicate how many other enemies can be in battle with it at once.  Remember, bigger enemy pictures take up more space, so you'd probably want a lower call value.
Outside Pic: It's a dropdown list of all the pictures you can use in the game.  Here's a list.
Movement: This dictates how the enemies move in the outside world.
 
Red Antoid
20
Follow you when you move
New Age Retro Hippie
21
Gets excited when you approach, then chases you
Zombie Dog
22
Whirling Robo
23
Zooms back and forth
Ramblin' Evil Mushroom
24
Sits down when not nearby (requires an extra frame of animation, so some enemies might goof up if you give them this...)
Mr. Batty
25
Moves as soon as you see it, otherwise still (also requires an extra frame)
Starman
26
Warps around
Enraged Fire Plug
27
Circles around, follows when it sees you
Crazed Sign
28
Jerks around, then moves quickly
Bad Buffalo
29
Moves slowly, then speeds up, straight line
Ego Orb
30
 
Mystical Record
31
Moves quickly, straight line when you move
Magic Butterfly
32
Always runs, slowly, gain PP at the end (It will turn into a butterfly)

Battle Sprite: Picks which enemy image to use.  Here is a list of them, but if you change them with the CGPED you'll probably want to make your own list to modify...
Pallete: Pallets are 16-color sets that the images use.  For reference, all color pallets are available at this page.
Death Sound:  Normal is a "fwoosh," while Boss is a "fwoo-swoo-swoosh."
Music:  This is pretty self-explanatory.