How does one crop an .ai image to a defined shape?

Question

How does one crop an .ai image to a defined shape?
In other words, I want to select and crop from a larger image an area such as a rectangle that I define.
Right now, I try to select and crop a rectangular portion of an image but every shape that is even partially within the rectangle is selected both within and without the rectangle.
I am using CS2 on a Mac.

Answer 1

Clifford,
I've figured out part 1, how to crop an image using a rectangle on  another layer.
Then I did:
To really get rid of the outlying parts, with the Clipping Mask still 
selected you may:
5) Choose anything but Normal in the Transparency palette dropdown 
and Object>Flatten Transparency (just keep the defaults).
The result was "Filter cannot complete because of unknown error"  FSpt
Is this a bug, or is their a problem with the way I am following your 
method?
It is hard to say.
It is more convenient to place the rectangle mentioned in 1) on the same layer; if you place the path(s) to define the Clipping Mask, the Clipping Mask and its contents will be on that layer, everything from lower layers being moved to it.
What about 2) - 4)?
It is easier to answer if you state what happens in the individual steps (repeated here):
1) Create a rectangle on top of the image with the same size (you may use the Transform palette/panel to see the size, and to place it by);
2) Create the cutout shape;
3) Select 1) and 2) and Object>Compound Path>Make;
4) Also select the image, and Object>Clipping Mask>Make.
To really get rid of the outlying parts, with the Clipping Mask still selected you may:
5) Choose anything but Normal in the Transparency palette dropdown and Object>Flatten Transparency (just keep the defaults).