This is what I've come up with, and I think it will work well:
* When a selection tool is active, the selected pixels will be tinted. This will enable the user to be able to tell which pixels are selected and which are not.
* When any other type of tool is active, the selected pixels will not be tinted.
* When transforming the selected pixels (scaling, rotation, translation), the outline will not be drawn. The outline will of course be drawn while transforming just the selection.