Hi there all.
Finding the answer to my first question, I see that you can rotate the local axis by going into component mode, then click on the question mark, then select the pivot point and then click on the rotate tool to rotate the pivot point. In addition I see that when I go back to object mode, and if you double click on the move tool, you get the move tool attributes. In here you can choose all different ways how you want your move manipulator tool to react. This includes having the move tool to have along the Object's axis, Local axis, World axis, Normal axis, and Along rotation axis.

Now if I was to rotate the local axis say 45 degrees, and then chose Along Rotate Axis in the Move attribute window, the move tool will follow the angle to what you have specified in the Rotate Local Axis. However, double clicking on the scale tool to open the scale attributes window, there is no option to allow the scale axis to follow the Local Rotate axis. Is there another check box somwhere else or something like that so that the scale axis can follow the Local Rotate axis?

What I am tring to do is I need to select the vertices of an object and have the scale pivot to follow the direction of these vertices that are selected.

I have read in this forum that you could create another object and then group the 2 objects togther, but this doesn't work when you only want to select a few vertices. So is there something that I am missing cause it seems odd that you can have the move tool follow the local rotate axis but why not the scale tool?