The OpenStreetMap plugin in QuantumGis 1.8 is buggy. The normal select and identify tool donot work. You need the identify tools that comes with the plugin to highlight and get information of the feature. You can use QuantumGIS 1.9 it has not been officially released yet. but you can get it from http://qgis.org/downloads/weekly/. You will find openstreetmap option in vector menu.
UPDATE:
QGIS 2.0 has been released.