While we've seen some pretty amazing custom levels on PlayStation 3's Little Big Planet, Microsoft's answer to a user generated content game is a bit different.  The toolkit is called Kodu, and it's designed from the ground up to be a visual programming experience.

I think it's human nature to want to try to create.  Whether you are creating your own art, literature, movies or games; humans have a switch somewhere in that brain of theirs that makes them creative.  Every gamer at some point as said - "I want to make a game."