So I read "We do not issue engine licenses to individuals, nor do we provide the engine for non-commerical purposes". So does this mean no educational licenses? If so can somebody please explain the rationale here because I don't get it. I would've thought free download was the way to go (at least would expect educational licenses available for Uni's and so on) if a game industry tool is trying to get established especially as (correct me if I'm wrong) the market leader and industry standard is currently free to download.

What am I missing here. Is this a timing thing maybe, something that will change after Crysis 2 is released it would be cool to have it free lol.

Dunno what you're reading but it's quite clearly stated on: http://mycryengine.com/

? Game Licenses
Game Development licenses are available to established games studios. We do not issue engine licenses to individuals, nor do we provide the engine for non-commerical purposes, such as Mod Teams, via this site. For information about obtaining the Mod SDK please visit our website at http://www.crymod.com.
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? Simulation License
Simulation licenses are available to companies who wish to work with our cutting edge technology in areas outside of the traditional realm of game development. These include companies working in commercial training, medical imaging and interactive simulations.
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? Educational License
The CryENGINE? 3 Educational License is available to educators wanting to ensure that their students gain experience with the state-of-the-art in game development and real-time 3D technology. For courses and research projects in game development, 3D graphics, simulation, architecture, animation, film and design, CryENGINE? 3 is the most up-to-date technology available and is now FREE.
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? Visualization License
Visualization licenses are available to companies working in offline visualizations, such as special effects and video production companies, architectural and engineering companies looking for an interactive product for visualizing their concepts in real time.
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so what kind of editor is available to the public and modders? like what kinds of features aren't available

We'll probably know that when the game will be released.

Dunno what you're reading but it's quite clearly stated on: http://mycryengine.com/

? Game Licenses
Game Development licenses are available to established games studios. We do not issue engine licenses to individuals, nor do we provide the engine for non-commerical purposes, such as Mod Teams, via this site. For information about obtaining the Mod SDK please visit our website at http://www.crymod.com.
Get to learn more / Register...

? Simulation License
Simulation licenses are available to companies who wish to work with our cutting edge technology in areas outside of the traditional realm of game development. These include companies working in commercial training, medical imaging and interactive simulations.
Get to learn more / Register...

? Educational License
The CryENGINE? 3 Educational License is available to educators wanting to ensure that their students gain experience with the state-of-the-art in game development and real-time 3D technology. For courses and research projects in game development, 3D graphics, simulation, architecture, animation, film and design, CryENGINE? 3 is the most up-to-date technology available and is now FREE.
Get to learn more / Register...

? Visualization License
Visualization licenses are available to companies working in offline visualizations, such as special effects and video production companies, architectural and engineering companies looking for an interactive product for visualizing their concepts in real time.
Get to learn more / Register...

I have an awful habit of surfing around the web at speed and skim reading everything. Busted lols.

At least you get your free Sandboxeditor with Crysis 2, i think.