From BlenderWiki

3D Cursor as Pivot

The 3D cursor is the simplest most intuitive of all pivot points, it allows for total control of the results. It can be summarize by this: position it and transform.

Positioning the 3D cursor

There are a few methods to position the 3D cursor.

• Using LMB in the 3D area. For accuracy you should use two perpendicular orthogonal 3D views, i.e. any combination of top (7 NumPad), front (1 NumPad) and side (3 NumPad). That way, in one view you can control the positioning along two axes and determine depth in the second view.

• Using snaps:
  • ⇧ ShiftS → Cursor -> Grid to send the 3D cursor to the nearest visible point of the grid.
  • ⇧ ShiftS → Cursor -> Active to send the 3D cursor to the active (last selected) object, edge or face center, or to the active vertex.
  • ⇧ ShiftS → Cursor -> Selection to send the 3D cursor to:
    • The object center of an object.
    • A vertex.
  • When there is more than one element in the selection and the Bounding Box Center pivot point is selected, ⇧ ShiftS sends the 3D cursor to:
    • In Object mode, to the center of the bounding box surrounding the objects centers.
    • In Edit mode, to the center of the bounding box surrounding the selected vertices (even in edge or face selection mode, it really is the vertices that are selected indirectly that are taken into account).
  • When the Median Point pivot point is selected, ⇧ ShiftS sends the 3D cursor to:
    • In Object mode, to the median of the object centers.
    • In Edit mode, to the median of the selected vertices.

Lots of possibilities is lots of power!

• Numerically, you can use the View Properties... entry of the View menu (from the 3D view header), and then enter the 3D Cursor location in the 3D Cursor section of the resultant View Properties panel that should now be visible.

Transformation

All there’s left to do is to select the 3D Cursor as the pivot point and rotate, scale or mirror.