Do you mean edit the bones in a pose, or just the neutral bones (the regular skeleton with no animation?) If you are in a pose, selecting a bone will give you the 3D axises of which you can either lengthen/shorten the bone or rotate it, depending on the rotate/move tools on the toolbar.
Setting a bone sets a vertex, or a group of selected vertexes, to a bone. You can have a major and minor bone set to each vertex, and the factor is how much each bone effects each vertex. Use some of the stuff on the vertex menu to find unattached vertexes, or to help select vertexes, or to hide others so you can get at the ones you want to select.