To edit an existing mod such as Duct Tape, open the .pk4 file with an unzip utility such as winrar - http://www.rarsoft.com/ - then much around and replace the files at will.

If you want to edit id's pak files, open them and put your changes in a new one with a sequentially higher number (and leave the originals there so you don't have to reinstall the game if you muck up).

What language do the files use?

The script files are coded in a 'C++ like' language, that I'm calling DoomC++ for now.

What do you use to edit them?

Any text editor will do.

Correct me if I'm wrong, but if you leave the files un-pak'd but in the correct directory structure, won't the game automatically use them over the pak'd ones? or will paks override raw files?

Raw will override .pk4, and pk4 with a higher number will override anything with a lower number.