Its been awhile since I had to open this. Does the toolset have to be downloaded seprately or is it included?

It is included. You can find it in the launcher.

Thanks for the tip. You see I was loading the game with the desktop shortcut provided by the install program. That bypasses the original launcher and therefore the toolset. In the game folder there is NWN2Launcher file and that can be used to access the amazing toolset that comes with the game.