Each level consits of two things, a .map and a .scm file. The map file contains all the terrain which builds up a level whie the scm file contains a list of all the objects and settings for this specific map.
Appart from creating specific levels, it is also possible to create new sets of levels. In order to do this you need to also create a .set file which describes the general theme and gives the name of the first level in the set. All the remaining levels in you set comes from your .scm files since each goal specifies which level is the next. It is thus even possible to have alternative paths for completing your level. You should also create a corresponding .jpg file with a screenshot from one of your levels, typically the starting level, which gives the user a good idea of how your level looks.
Instead of creating your own levels it is of course possible to use levels and sets from others. Take a look at the trackballs webpage to see if any new levels have appeared after the latest release. In order to install a custom created or a downloaded sets of levels you need to place all the files ( .map, .scm, .set, .jpg) under your share/levels directory. For windows users this means into the share\levels directory where trackballs is currently installed. For linux users this means into either /usr/local/share/trackballs/levels/ (assuming that the game is installed under /usr/local) or under $HOME/.trackballs/levels/. If you are unsure where your other levels are currenly installed just search for the file "lv1.scm" anywhere on your harddrive.