The "Landscapeeditor.ini" file in the same folder as the landscape editor program specifies a path to the base of the Black and White 2 game folder. Make sure this file has the correct path. Note that this is the path to the Game folder, not the actual landscape editor folder.
Right-click on the program and select 'run as administrator'.
Like the other person mentioned, you cannot run this and the game at the same time. Occasionally, the game will crash or exit uncleanly and leave a process running. Try restarting the computer first.
You can try this.. this is potentially dangerous.. don't make a mistake. This will also revert all of your landscape editor settings to default.
Open the registry editor ( "regedit" from the Windows start-menu search box). Go to HKEY_CURRENT_USER\Software\Lionhead Studios Ltd\ . You should see a key (folder) called "BW2Editor". Right-click on the folder called "BW2Editor" and select 'delete' to remove the entire key. Close the registry editor. Try opening the landscape editor again.