CACK is an engine for playing simple 2D adventure games. It will eventually include a GUI editor, but is currently just a player.
Versions for Windows and the GP2X console are included in the download, as well as the full source for Linux users. It will probably also compile on OSX but this is untested.
Work hasn't started on the editor yet.
Games consist of images, sounds, xml lists of objects and actions, and text based maps, so even without an editor it is very simple to create games. All you need (apart from the images and sounds) is a text editor and this page.
Yes, CACK is completely free and the source is also included (released under the GPL).
There is no fighting system in CACK, and it is unlikely there ever will be one. CACK is aimed at problem solving / object using games rather than hack and slash type rpgs.