Tip #1 - Use Grid!
Sometimes grid may not be useful for what you're doing. If you need precise placement of anything, such as stickers or decorations, it may be a good idea to turn grid off for a second!
The most important tip when it comes to creating a level is to use grid.
Grid allows you to easily align every aspect of the level, whether it be materials, objects, stickers/decorations, or logic.
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To enable the grid option:
​- Enter Create Mode
- Pause the game
- Set grid to Small, Medium, or Big 
​The most common (and usually the best) grid size to use is Small.
It's important to remember that grid should almost always be used. It keeps things tidy, symmetrical, to-scale, and is generally easier to work with in all aspects... especially when you want to return to a previous area in your level and change things later on!

Tip #2 - Grid Placements
There will obviously be times when you need a platform to be smaller than the recommended size. There are many situations and areas in a level that may be better off with thinner platforms.
In a level players usually walk on materials... but how do we know when those materials are the right size?
When creating a player platform it's a good idea to stray from the normal "blockiness" that most platformers have. Instead of having each walkway be straight or a perfect slope, try to incorporate more curves and hills.

However, curvy platforms may not fit the aesthetic/style of your level. If you think you are better off without it, then don't feel guilty for not using it!

When taking out a square shape of material from your popit you will notice the average size is 4x4 in small grid blocks. This is usually the best size to use when making a platform the player walks on! It's also a nice size for beams/pillars.

Tip #3 - Modular Level Design
Here's a great video on modular level design!
Modular level design sounds a lot fancier than it is! 
Modular creating is probably the best tip I've learned... right underneath grid, of course.
With modular creating, you can easily move around parts of you level for revision. Almost every piece of the level is independent from other pieces!

To start implementing this method into your levels, all you have to do is keep everything as a separate piece. Try not to glue objects together unless it's necessary. Moving objects may need to be glued together, but everything that isn't supposed to move should be set to Static and kept unglued from other pieces. Having a lot of glued content on-screen will decrease your level performance tremendously.

Watch the video to the side for a great example and tutorial on this!

This video was made in LittleBigPlanet 2 and it's no longer necessary to use anti-gravity tweakers. You can simply tweak the object to be Static, which has the same effect!

Tip #4 - Optimization
Optimization cannot be stressed enough, especially with LBP3 spanning across both the PS3 and PS4 consoles. Like it or not, there are many players on both version of the game, so it's best to keep it playable for both... although your level should still be optimized regardless of which consoles the game is on!
Optimization is a somewhat-hefty topic, so bare with me!

Level Geometry

Use as little level geometry as possible! If you are creating complex scenes or using the dynamic thermometer, this will help a lot.
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Anytime you are placing logic, lighting, decorations, game cameras, or anything that isn't directly interacted with, you will want to use a floating triangle of sticker panel. Set the opacity to 0%, and you can even change the color to help color-code your level and keep it even more organized!
The shape with the least amount of points/sides is the triangle. This may not feel like a lot, but it adds up. The game has to compute every corner/point, so it's best to keep it simple and it will likely help your thermometer in the end as well!

Dephysicalizing

Anything the player does not come in contact with (or anything that doesn't require collision) should be made Static and then be Dephysicalized. If something in your level is purely cosmetic (just there for looks), dephysicalizing it will help smooth out your level's performance.
For example, if you have an effects material like rain, sparkles, fog, etc., then you should turn the collision for those objects off.
​Any background objects or materials out of the player's reach (like a book, or a ceiling that can't be touched) should be dephysicalized as well. This will let the game know that the hitbox doesn't need to be used and will leave only the visuals in tact.

Try not to Glue!

When possible, try to keep things unglued from one another. One of the most common reasons a level lags is because of too many glued objects/materials being on-screen. The best solution to this is to keep things set to Static if it isn't meant to move. This goes hand-in-hand with Modular Level Design, as previously mentioned.

Tip #5 - Background Layers
 Layer launches are great, but using them every time you go back and forth between layers can get old fast. Try drafting some gameplay motifs where the player moves between layers in a unique or interesting way.
Background gameplay is necessary to make a level feel "official" and be as engaging as possible. LBP3 gave you 16 layers, so use them! There are so many new tools that will help your player get from front to back.
Not only is background decor important, but background gameplay is also important. When you want your player to launch or move to a back layer be sure to keep at least five layers between the front and back layers. That isn't a rule that's set in stone, but it is the normal amount of space used in official developer levels.

Another good tip? Keep decorations and objects far enough behind the player for breathing room. You never want your player to wonder if they are supposed to interact with the background decor.

Tip #6 - Foreground Layers
You won't always be able to add foreground decor. It's okay to leave it out sometimes, but if you do include it then you'll want to make sure it isn't overused.
The same mindset for Background Layers apply to Foreground Layers!

With foreground layers it's usually good practice to leave about two layers in front of the level's first playable layer. Doing this will let you add in some decorations and objects later on for a neat depth effect. You'll notice how the level feels less "flat" and more immersive.
​Just don't obstruct the player's view or overuse foreground decor, otherwise you'll end up with a cluttered mess! 

Story Mode makes great use of this. The best examples can be found in the Ziggurat level "Tutu Tango".

Tip #7 - Gameplay Motifs
It's a good idea to keep a clean copy of your gameplay design so you can re-edit it easily.
Motifing is a common level design practice used in the industry and especially in the development of LBP3.
Creating gameplay motifs means that you create the bare minimum of your idea. Use some cardboard and map out the basics of what you have in mind. Once your gameplay idea is built and polished, you can easily rework it and edit it without worrying about affecting the level around it. By making gameplay motifs you are essentially just blocking out your ideas somewhere outside the playable area, or in a new level altogether.
Once your idea is finalized and ready to insert, you can simply plug it into the area of your level that you want to use it in.

For example, if you want to create a gameplay segment where Toggle weighs down a spring platform, then launches up to grab something, you can create a gameplay motif of this somewhere outside the level boundaries. Once your basics outline has been done and the segment is playable, you can then plug it into the level itself and decorate it. This makes it super easy to just copy and paste your ideas throughout the level, and this way you know they will be consistent and easy to work with! This is a great way to make sure your object is independent and doesn't rely on other parts of the level as well (which in turn makes it easier to edit later).

Tip #8 - Wires and Tags/Sensors
There are certain situations where tags and sensors just won't do. As long as your level isn't cluttered and the pieces are near each other, it's no big deal to wire them up directly instead of wirelessly! Just make sure it loads in correctly if you're using the dynamic thermometer.
A mistake that many creators make is wiring up everything in sight. You would think that's how it works, right? ...Well, you may be wrong!
This is part of optimization, but it warrants its own tip since it's a common problem even from an organizational viewpoint.
Anytime you are creating logic or wiring things up, you should always remember this:
- If the logic needs to connect to something outside of the entity it's attached to, then you should broadcast the signal with tags instead.
- If the level dynamically loads, you should almost always use Remote Tag Sensors. The radius of logic (like normal tag sensors) will increase the loading zone, causing optimization issues and loading things that shouldn't.

When you wire things together that aren't on the same object, you can have problems later on.
Example of the issues you could have:
- Your level will look like a cluttered mess with all those wires spanning across the place.
- You will regret it later on if you come back to edit something. You won't know what goes where!
- By stretching wires across the level you are not only destroying your level's optimization, but you're making everything overly-complicated.
- If it dynamically loads in, it will either break or try to load everything the wires are connected to at once.

It's better to avoid issues from the start. Using Remote Tag Sensors will allow you to detect a tag anywhere in a dynamically loaded level, as long as it's also loaded in at the same time. Permanency Tweakers, Dynamic Linking, and Pre-loaders can help you to solve any issues with tags not loading in with remote tag sensors.
As previously mentioned, this guide is a work-in-progress.
Please check back later or suggest tips/tricks for more additions!