Create a custom selection extension by extending ArcObjects
SelectByLineTool.cs
// Copyright 2012 ESRI
// 
// All rights reserved under the copyright laws of the United States
// and applicable international laws, treaties, and conventions.
// 
// You may freely redistribute and use this sample code, with or
// without modification, provided you include the original copyright
// notice and use restrictions.
// 
// See the use restrictions.
// 

using System;
using System.Drawing;
using System.Runtime.InteropServices;
using ESRI.ArcGIS.ADF.BaseClasses;
using ESRI.ArcGIS.ADF.CATIDs;
using ESRI.ArcGIS.Framework;
using ESRI.ArcGIS.ArcMapUI;
using System.Windows.Forms;
using ESRI.ArcGIS.Carto;
using ESRI.ArcGIS.Geometry;

namespace SelectionCOMSample
{
  /// <summary>
  /// Summary description for SelectByLineTool.
  /// </summary>
  [Guid("15de72ff-f31f-4655-98b6-191b7348375a")]
  [ClassInterface(ClassInterfaceType.None)]
  [ProgId("SelectionCOMSample.SelectByLineTool")]
  public sealed class SelectByLineTool : BaseTool
  {
    #region COM Registration Function(s)
    [ComRegisterFunction()]
    [ComVisible(false)]
    static void RegisterFunction(Type registerType)
    {
      // Required for ArcGIS Component Category Registrar support
      ArcGISCategoryRegistration(registerType);

      //
      // TODO: Add any COM registration code here
      //
    }

    [ComUnregisterFunction()]
    [ComVisible(false)]
    static void UnregisterFunction(Type registerType)
    {
      // Required for ArcGIS Component Category Registrar support
      ArcGISCategoryUnregistration(registerType);

      //
      // TODO: Add any COM unregistration code here
      //
    }

    #region ArcGIS Component Category Registrar generated code
    /// <summary>
    /// Required method for ArcGIS Component Category registration -
    /// Do not modify the contents of this method with the code editor.
    /// </summary>
    private static void ArcGISCategoryRegistration(Type registerType)
    {
      string regKey = string.Format("HKEY_CLASSES_ROOT\\CLSID\\{{{0}}}", registerType.GUID);
      MxCommands.Register(regKey);

    }
    /// <summary>
    /// Required method for ArcGIS Component Category unregistration -
    /// Do not modify the contents of this method with the code editor.
    /// </summary>
    private static void ArcGISCategoryUnregistration(Type registerType)
    {
      string regKey = string.Format("HKEY_CLASSES_ROOT\\CLSID\\{{{0}}}", registerType.GUID);
      MxCommands.Unregister(regKey);

    }

    #endregion
    #endregion

    private bool m_isMouseDown = false;
    private ESRI.ArcGIS.Display.INewLineFeedback m_lineFeedback;
    private SelectionExtension m_mainExtension;
    private IMxDocument m_doc;

    public SelectByLineTool()
    {
      base.m_category = "Developer Samples"; 
      base.m_caption = "Select ByLine Tool C#.";  
      base.m_message = "Select by line tool C#.";
      base.m_toolTip = "Select by line tool C#.\r\nSelection Sample Extension needs to be turned on in Extensions dialog.";  
      base.m_name = "ESRI_SelectionCOMSample_SelectByLineTool";   
      try
      {
        base.m_bitmap = new Bitmap(GetType().Assembly.GetManifestResourceStream("SelectionCOMSample.Images.SelectByLine.png"));
        base.m_cursor = new System.Windows.Forms.Cursor(GetType().Assembly.GetManifestResourceStream("SelectionCOMSample.Images.SelectByLine.cur"));
      }
      catch (Exception ex)
      {
        System.Diagnostics.Trace.WriteLine(ex.Message, "Invalid Bitmap");
      }
      m_mainExtension = SelectionExtension.GetExtension();
    }

    #region Overriden Class Methods

    /// <summary>
    /// Occurs when this tool is created
    /// </summary>
    /// <param name="hook">Instance of the application</param>
    public override void OnCreate(object hook)
    {
      IApplication application = hook as IApplication;
      m_doc = application.Document as IMxDocument;

      //Disable if it is not ArcMap
      if (hook is IMxApplication)
        base.m_enabled = true;
      else
        base.m_enabled = false;
    }

    /// <summary>
    /// Occurs when this tool is clicked
    /// </summary>
    public override void OnClick()
    {
    }

    public override void OnMouseDown(int Button, int Shift, int X, int Y)
    {
      IActiveView activeView = m_doc.FocusMap as IActiveView;
      IPoint point = activeView.ScreenDisplay.DisplayTransformation.ToMapPoint(X, Y) as IPoint;

      if (m_lineFeedback == null)
      {
        m_lineFeedback = new ESRI.ArcGIS.Display.NewLineFeedback();
        m_lineFeedback.Display = activeView.ScreenDisplay;
        m_lineFeedback.Start(point);
      }
      else
      {
        m_lineFeedback.AddPoint(point);
      }

      m_isMouseDown = true;
    }

    public override void OnMouseMove(int Button, int Shift, int X, int Y)
    {
      if (!m_isMouseDown) return;

      IActiveView activeView = m_doc.FocusMap as IActiveView;

      IPoint point = activeView.ScreenDisplay.DisplayTransformation.ToMapPoint(X, Y) as IPoint;
      m_lineFeedback.MoveTo(point);
    }


    public override void OnDblClick()
    {
      IActiveView activeView = m_doc.FocusMap as IActiveView;

      activeView.PartialRefresh(esriViewDrawPhase.esriViewGeoSelection, null, null);

      IPolyline polyline;

      if (m_lineFeedback != null)
      {
        polyline = m_lineFeedback.Stop();
        if (polyline != null)
          m_doc.FocusMap.SelectByShape(polyline, null, false);
      }


      activeView.PartialRefresh(esriViewDrawPhase.esriViewGeoSelection, null, null);

      m_lineFeedback = null;
      m_isMouseDown = false;
    }

    public override bool Enabled
    {
      get
      {
        if (m_mainExtension == null)
          return false;
        else
          return m_mainExtension.HasSelectableLayer() && m_mainExtension.IsExtensionEnabled;
      }
    }
    #endregion
  }
}