Grab/Rotate Tool Question

I was looking at the Mancandy blend file and I was wondering how to get the rotate/grab that shows up on the 3d screen. I found that ctrl-alt-R replaces the grab tool with the rotate tool and ctrl-alt-G changes it back. How do I get the tool to show the grab and the rotate at the same time? Also, how do I set the tool so that it is based off the direction of the local or normal axis like it does on the mancandy file?