Stamp Tool  
       Click to stamp whatever is in the
       Hold LCONTROL to stamp with transparency

Whatever is in the what?! I spent too long fiddling around trying to get it to stamp something instead of acting like an eraser. Someone please hand me a clue...

Basically, if you mark a set of sprites, or a block of pixels with Shift+drag and then copy them with Ctrl+C, the stamp tool allows you to paste whatever you copied first.

You can also use the 'marquee' tool to mark stuff instead of Shift+dragging.