Select your object then hit the insert key. This lets you move the pivot around. Now the trick to get it aligned to an edge is to hold the C key then move you mouse cursor over to the edge you want to snap to. Click the middle mouse button and move the mouse slightly while holding the middle mouse button. The pivot will jump to the edge. While you have the middle mouse button held you can slide the pivot along the edge. You can also do this with the V key for snapping to vertexs and the X key to snap to grid.
Thanks pyromania: http://www.polycount.com/forum/showthread.php?t=37371