I imported a few tree models, and noticed they are floating above the ground in the world editor.
I enabled the ground in the model editor and tried to slide them down the Y-axis to make them stick in the ground with their roots. However, when I do right-click and set a negative value for Y, after clicking 'apply', the ground grid shifts down again so it's just like before. This happens to all 3 axis as well.

How exactly do I solve this?

Well you can adjust the y-pos of the model inside WE using ctrl + right mouse drag

Even though the grid moved down to his feet again, its worked. For clarification, try View > Identity Matrix, to help give you an idea where you have transformed to in local space.

Don't go pressing Ctrl+H or anything though, else you'll reset it

Edit: Also, in the WE, make sure you disable the anchor. (Unselect all three of the already selected central [Y-axis] align boxes, and it should put the Identity Matrix, with your corresponding local transformation, on the ground)

Ok, now it's working. I'm starting to think I simply forgot to save the .mesh again. -_-

Also, llynx, I prefer it in the Model Editor, since I want to use several trees with the object list. And since they don't all have the same distance to the ground plane, it gets annoying to adjust their position one by one.

Thank you both.

EDIT: With a second try, nop.. Still not working. It seems like the ground plane automatically jumps to the bottom of the model (which is the tips of my roots, which need to stick deeper into the ground).
Even after moving it down, saving it and re-entering in the WE, it's still floating above the ground. :/

When you create physics for tree move it up a bit.

The ground plane is located at the bottom of the mesh/phys in ME (not at 0,0,0 pos)
make sure you supply correct phys body, and it is set at bottom.
also in WE check for the "align" options of an object.
if it doesn't help, post some screens of object in ME, mesh/phys and in WE.

Excellent, thank you. To test my trees, I imported them without a physbody.
Seems like that wasn't a good idea. It works now.

Since we in the "WorldEditor" section. A few questions:
1. How can we rotate a model in the world editor. (use CTRL + Right Click but its just help u to move xyz)
2. How can we rotate the screen without moving the object? I seen in the video that Esenthel published on the website.

Rotate object = Alt+hold right mouse button

Rotate screen = hold in mouse wheel remember to zoom in on the camera matrix point eg scroll as close as possible.

2. move the object or move the camera?
if camera then switch to FPP mode (tab), then rotate
if object, then you need to have object in your center of focus (use the center object button in top left corner)