umm… press R?
i dont know why you are complaining, when you press R, you will rotate around the center of your selection, and there will be a line from your cursor to that point.
if you move the cursor to that point, ofc it will go crazy, just move ur mouse further away.
also if you wish to lock it to an axses, press R followed by X, Y or Z. and by typing inn a number afterwards you can set an exact rotation value.
i dont see your problem.
also just a sidenote, if you are familuar with other 3D programs you might be used to moving the cursor left and right (or up and down) to change the value, well in blender you move the cursor in a circle around the pivit point.