OK, first of all, make sure you have the correct editor. There was a mistake when the patch first came out and the editor wasn't compatible withe the game, so you couldn't start any new games after making changes. You need editor version 1.15, the one that came with the patch was 1.17.
The file the game uses for all it's parameters is called civ3mod.bic. If you are going to change anything, make sure you back it up before you proceed. I can happen that making any alteration can corrupt the file, and you don't want to have to reinstall the game because you didn't back it up. Or else you can save your changes as a scenario, then use the Load Scenario link in the start menu. This is what Firaxis highly recommends you do.
All you have to do is double click on the icon for civ3mod.bic, and the editor will automatically load up. You can also make a shortcut if you like, and place it on your desktop. Once in the editor, go to Rules, then select Edit Rules, this will bring you to the various menus. There's a couple of thing you can do. First, if you go to the World Sizes area, look for something called Optimal Number of Cities. If you increase this number, you will have less problems with corruption, but then so will the AI. Or you can go to Improvements & Wonders, and select the Reduces Corruption box for any improvement you think would be appropriate.
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