I\'m looking into a control with two rectangles: one inside the other. I want the user to be able to drag the inner rectangle, resize it and if possible rotate it as well within
This guy on CodeProject has a series of articles that do exactly what I think you're looking for. I expect the first article will be of most help to you, but the entire series is good.
1. Drag, resize, and rotate elements on a canvas
2. Designer Canvas with Zoombox
3. Connecting Items
4. A frankenbuild