The infinite-ness is provided by the Foundry system, a returning (and far more refined) feature which Cryptic implemented in one of its other flagship MMOs, Star Trek Online. Rather than patching in the campaign-crafting tools after launch, however, Cryptic is making the Foundry the keystone of the Neverwinter experience -- an appropriate callback to Nights' UGC-centric success.
Though it honors the original games' customizable spirit, Cryptic has taken great pains to ensure the barrier for entry is far lower for folks who lack the design expertise or general patience required to craft and find UGC levels in Neverwinter Nights. In fact, it only took the demo's handler 15 minutes to whip up an entire instanced mission, complete with enemies, NPCs, dialogue trees, quest parameters and a dungeon to contain them all.
The Foundry's ease of use comes from it's highly visualized nature, a trait it inherited from Star Trek Online's UGC features. Almost all of its different aspects only require to drag assets from pre-built (but entirely customizable) libraries and drop them into an empty field. For example, maps are created by dropping entire prefabricated rooms onto a grid, attaching them with doors and placing a spawn point where you want your heroes to appear. Players can also place specific objects in these rooms or alter their lighting setups, but whipping up a basic dungeon is no more difficult than placing tiles in the tabletop version of Dungeons and Dragons.
The details of the quest itself are built in the Story tab, which lets you drag and drop quest parameters from the library into a linear path running from start to finish. These include objectives like finding and chatting up with an NPC, interacting with a certain object, reaching a point in the instance or slaying a particular monster -- all of which can be placed in your map as an asset also found in the library tab.
This system lends itself to even deeper customization options: The "speak to this NPC" objective, for instance, also allows you to craft said character's dialogue and program in a player's branching responses. You can attach success and failure indicators to each option, force them to lead to the same NPC response or further branch them into even more dialogue trees -- all by dragging, dropping and connecting the various elements you see on the board.
These instanced missions can also interact with the persistent world which Cryptic has designed. Players can build dialogue trees for the core game's NPCs, apply a layer of interactivity to objects in the environment or link doors to their instanced dungeons. A Cryptic developer explained that leveling your persistent character solely through user-generated quests is a definite possibility -- though the studio's still figuring out how to make sure the system can't be exploited for fast XP and hot loot.
The big question is, of course, how the game is going to actually play. The demo I saw took the player into the barebones dungeon, revealing a fairly common third-person perspective and an empty hotbar -- but the game was on God Mode, allowing the player to decimate his enemies just by touching them. It's too soon to say if Neverwinter will recapture the strategic combat of its predecessor (not to mention the pen-and-paper game which even preceded the video game franchise), but if it can pull it off, Cryptic's going to have a major online RPG contender on its hands.