xterm uses the X-Windows stuff for it. in xterm one can find:
#if !OPT_PASTE64
static
#endif
void
xtermGetSelection(Widget w,
              Time ev_time,
              String * params,      /* selections in precedence order */
              Cardinal num_params,
              Atom * targets)
{
    Atom selection;
    int cutbuffer;
    Atom target;

    if (!IsXtermWidget(w))
      return;

    TRACE(("xtermGetSelection\n"));
    params = MapSelections((XtermWidget) w, params, num_params);

    XmuInternStrings(XtDisplay(w), params, (Cardinal) 1, &selection);
    cutbuffer = CutBuffer(selection);

    TRACE(("Cutbuffer: %d, target: %lu\n", cutbuffer,
         targets ? (unsigned long) targets[0] : 0));

    if (cutbuffer >= 0) {
      int inbytes;
      unsigned long nbytes;
      int fmt8 = 8;
      Atom type = XA_STRING;
      char *line;

      /* 'line' is freed in SelectionReceived */
      line = XFetchBuffer(XtDisplay(w), &inbytes, cutbuffer);
      nbytes = (unsigned long) inbytes;

      if (nbytes > 0)
          SelectionReceived(w, NULL, &selection, &type, (XtPointer) line,
                        &nbytes, &fmt8);
      else if (num_params > 1) {
          xtermGetSelection(w, ev_time, params + 1, num_params - 1, NULL);
      }
#if OPT_PASTE64
      else {
          FinishPaste64((XtermWidget) w);
      }
#endif
      return;
    } else {
      struct _SelectionList *list;

      if (targets == NULL || targets[0] == None) {
          targets = _SelectionTargets(w);
      }

      if (targets != 0) {
          target = targets[0];

          if (targets[1] == None) {      /* last target in list */
            params++;
            num_params--;
            targets = _SelectionTargets(w);
          } else {
            targets = &(targets[1]);
          }

          if (num_params) {
            /* 'list' is freed in SelectionReceived */
            list = XtNew(struct _SelectionList);
            if (list != 0) {
                list->params = params;
                list->count = num_params;
                list->targets = targets;
                list->time = ev_time;
            }
          } else {
            list = NULL;
          }

          XtGetSelectionValue(w, selection,
                        target,
                        SelectionReceived,
                        (XtPointer) list, ev_time);
      }
    }
}

So this is how that is done in X-Windows.

I guess this will be quite hard for you. (I'm sure it would for me also, because I don't have done "raw" X-Windows programming). And it seems also that documentation is sparse. Howerver maybe you can make good use of:
http://www.sbin.org/doc/Xlib/

Regards
Friedrich