How to change the color of the selected code (Vim scheme)?

Selection color for gvim is set by the following line:

hi Visual  guifg=#000000 guibg=#FFFFFF gui=none

You can use named color values instead of the #nnnnnn RGB codes. Your existing line is set for black foreground and white background, just as you observed.

For example, if you want a light blue background with white foreground:

hi Visual  guifg=White guibg=LightBlue gui=none

Be sure the color file you are editing is in the vim7x/colors directory so both vim and gvim can find it. Its exact location can vary a bit depending on your OS platform.

How to set the color of the selected code in vi?

I'm using VIM 7.3 on Ubuntu and this does it for me within the editor:

:syntax on 
:hi Visual term=reverse cterm=reverse guibg=Grey

I'm using a colorscheme defined in the /home/youruser/.vim/colors/mycolorscheme.vim file. I set the command there and the changes take effect when vim starts.

syntax on
hi Visual term=reverse cterm=reverse guibg=Grey