Top-Down Design as opposed to (I guess) bottom up, is really an approach — a philosophy. PTC touts it as a software feature in their sales pitches, and they do supply good tools for accomplishing it, but really, Top-Down Design is a methodology, not a software feature. You can do it with or without the software tools.

Top Down is working through a product design starting at the top-level (usually at a top level assembly), then working “down” through subsequent subassemblies and finally to the parts. The opposite, bottom up — if you want to call it that — would be starting at the part level and design “up” to the assemblies. Think about how you do it. Do you start with the parts?

Applying this approach can be fundamental in many areas of the concept to product processes. It certainly has implications in design, but also in manufacturing, process control, customer usability, specification compliance, etc.. A good sales pitch for the Pro/E Advanced Assembly Extension, AAX, and some applications to Top-Down utilization for processes. It is worth reading, if just for the perspective.

Top-Down Design is a really nice method to define where you are going from the beginning of a project. The approach takes a broad look, that then focuses more and more on the details. Starting at the top with the overall project specifications (a piece that Pro/Engineer sort of ignores), define what you know at each level working from the top down through the final details. I strongly recommend it. Realize, however, there are times when the details drive the big picture.

Wall thickness and draft requirements are a couple that come to mind.
Use the Pro/E tools like skeletons, datums and curves to define the important areas and functions. Use “Dummy” parts as necessary to preserve important spaces in the design — perhaps for the welding robot access. Then think carefully through the processes to determine what you think will be in each level of subassembly. Create those levels — even if there is nothing in them at the moment. Then fill in the gaps as more information becomes available.

In my experience there is a lot of iteration — running up and down the design tree as the project comes together. Thank goodness for the redefine aspects of Pro/E that allow you to change your mind without much hassle.

Especially the first time or two, you may do a lot of rework, but as you use the approach, you will become much smarter at choosing how to make it work in your environment. Do not let early frustrations or mistakes thwart your efforts. Like all new things it takes some learning and new thinking.

TIP: Take the time to do it right — that is, use good modeling practices. Take the time to build the appropriate assemblies, etc.. It will save you in the future.
TIP: Do not get into the details too early. There is a strong tendency to dive into the details of a key part long before the areas surrounding the part are defined. Resist this and it will save you a lot of time and redefinition.

Perhaps the above gives a good broad overview? I hope so. For more information, please get a design book on the subject (usually in the Mechanical Engineering section). That will give a much more complete description. PTC has a lot to say on the subject as far as their software is concerned — which is helpful, but learn the design philosophy first and you will be much farther ahead.