Interesting link, but wrong topic.
The problem is not how to tell the application that now I want to select rather than scroll (we have the same situation now with selecting text in the browser, it always requires some quirks).
The problem is that I won't be able to precisely hit the area where the selection should start.
It's difficult enough with a small stylus on the current touch screen. When you say "capacitive touch screen" and "fingers", I of course have to think of the jPhone and the way its touchscreen works. I'm not even able to type on the virtual keyboard with my fingers on the jPhone in portrait mode (and have to really concentrate to make it work somehow in landscape mode). So if I can't even hit relatively large keys, how would I be able to tell the application that my selection starts between "the" and "reason" in a text thats only 25% the size of those keys?

So we intentionally choose a not-so-perfect hardware for input in order to force applications to work around the shortcomings of this hardware, hoping that for some reason this will magically result in better applications. "Survival of the fittest", right?

Let me think about this for a moment....