I've made a quick submodule which allows the following:
- Restrict on a term by term basis which terms will appear in the widget (rather than by parent)
- Allows aliasing a term on the add/edit form which is sometimes semantically necessary (I like aeroplanes vs People who like aeroplanes)

I've seen this hard coded into a few projects I worked on over the last year so I thought I'd write a generic module for it.
http://drupal.org/project/content_taxonomy_termselector

If people find this useful, it would be nice to place a link on the content_taxonomy module page. Otherwise if it's too niche we'll just leave it here in the issue queue.