When you are cutting out shapes using the Intelligent Scissors tool, you must click on your original starting point after enterring the last point. After that, you should should click on the inside of the drawn shape and the shape will change into a selection (you may already know all of this).

Once your selection is made, you will wish to invert it ("Select->Invert" from the image menu). You can then "Edit->Clear" and the region outside of your drawn shape will become transparent. NOTE: it will only become transparent if the layer has an alpha channel (otherwise it will be filled with the background color). If the layer name in the Layers window appears in BOLD type (this indicates it has no alpha channel), you can add an alpha channel by performing a "Layer->Transparency->Add Alpha Channel" from the image menu.
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