Making selection color transparent when in editing mode in QGIS
In version 1.7, go to Preferences > Options > General tab (opened by default). Then, click the yellow color in front of Selection color and change the alpha canal value.
My Qgis version is in French, sorry if the translation is not exactly correct.
For QGIS 2.6:
- Project Properties:
General, Selection Color:
Reduce the Opacity: