This is a can of worms... There is much discussion on this. You might start looking at: https://bugzilla.gnome.org/show_bug.cgi?id=333514 or http://webcvs.freedesktop.org/icccm-extensions/selections/clipboards.txt?revision=1.3&view=markup

Typically, the applications I use which are "traditional X11 apps" have behavior #4, however, I would find behavior #3 most useful (but is sadly, not used by most apps).