Hm, I see. It may be more advantageous to keep the Add Bone tool the way you had it, based on the screen coordinate system, and the rotate/scale tool based on itself.
While testing and comparing in other programs like Blender, I can see that not having a rotation widget is really hurting. Currently, Anim8or is entirely reliant on the local coordinate system of the bone when animating. You can only rotate along the bone's axis using the three mouse buttons, and not relative to the screen or global coordinate system. Having a widget removes the need for three mouse button movement, enables screen X/Y based rotation, and frees up the animating experience a lot.
I know you're working on the figure editor at the moment, but I think this is a fundamental issue that extends into the figure editor as well. Because due to this restricted style of animation, the user has to mind the orientation of each bone while rigging, with absolute care and precision. In the other 3D programs I've used, the orientation of the bone doesn't have as much importance when rigging because when animating you can rotate either globally, locally, or along the screen XY coordinates. It's still good practice to have at least one axis aligned close to its main plane of movement, especially in some cases when working with constraints, but that's what the child-independent transformation feature I suggested in the earlier post is for.
When doing animation, guess which coordinate system I never use? Local. I animate almost entirely based on the screen coordinates, and then otherwise mostly global since it's more intuitive to animate relative to the entire world and the surrounding elements. All this is one of the reasons why I don't bother with joint limits.
^^^^And all that is justification to keep the Add new bone tool as you originally had it, being based off the screen.
You know, the graphic that shows the bone's joint limits (Bone Axis <X>), can be converted into a rotation widget. Draw it on top of everything, add detection on if/which axis was clicked and dragged on, and add an outer circle for screen coordinate rotation. Then make it change and transform based on which coordinate system the user has selected, and you're set. The pivot graphic is almost a translation widget as well.
Even if you don't implement widgets now, I think you're going to be forced to move away from the LMB/MMB/RMB axis transformation deal when it comes time to work on the sequence editor. It'll be a situation where you have to change it to screen coordinate rotation using the LMB, and then use the X/Y/Z axis buttons on the left toolbar to restrict to certain axis if necessary. That's the only way to drastically improve the animation experience without widgets (it's sort of a half-baked alternative), though I'd certainly recommend just getting the widgets done and over with now to save time in the long run...