Maybe I am misunderstanding something here, but this is what I see and do.

In the image below, I have an imported image. Note the end of the arrow that points to the circular rotation handle at the mid top. When you see this, you are in Resize mode. The corner handles will resize the image; the side handles will squish the image, the mid top and bottom handles will squash the image.
Click image for larger version. 

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If you see the above, click on the image once and the mode will change to the image below - what I call crop mode. The rotation handle is now at the upper right corner. The mid side handles and the mid top and bottom handles will crop, the top left handle will round the corners, and the bottom right handle will resize the image. Mouse over the handles to see what they do.
Click image for larger version. 

Name:	Xara crop mode.jpg 
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Thus to change modes, click on the image.

An interesting use is to take the mid left handle (or any other crop handle) and drag outwards. The top and bottom get cropped as the image gets wider and larger.