I'm looking for more functionality in two areas: typing shortcuts (so far I've used the built-in replace/with stuff, but that's rather limited, e.g. it can't insert formatted dates/times) and app launching via the keyboard (I don't currently have anything for that). Ideally, I'm looking for a single utility that does both; does one exist? If not, or if you feel they're not good, what individual tools do you recommend to check out? I see that the book discusses Keyboard Maestro. Are tools like Butler and Quicksilver worth a look?
Another neat feature would be to be able to select files and/or folders, and then be able to run a shell script with those as input, as if the shell script had been invoked on the command line with those files/folders as parameters.
Keyboard Maestro is a fantastic general-purpose automation tool. I use it for macros, clipboard history, and so on—and it can indeed be used for text expansion and app launching too. If I had to pick just one automation tool, that would be it, no question.
However, I find Keyboard Maestro less flexible when it comes to text expansion than something like TextExpander or Typinator. A bonus with TextExpander is that it syncs with my iOS devices and has an iOS 8 keyboard that can use all my usual abbreviations. And, for app launching, I really prefer LaunchBar, which learns as you use it (something Keyboard Maestro does not do). LaunchBar also lets you select one or more items and send them to another app, just as you're describing. But it doesn't do text expansion.
So, for me, the solution to the specific things you want to do would be to use two apps: TextExpander and LaunchBar. I could use Keyboard Maestro to do both, but it's not the ideal tool for those jobs, in my opinion.
As for Butler and Quicksilver (and Alfred), the book discusses all of those too. They are good apps, and they have lots of loyal fans. I've tried them, and I don't dislike them, but I find that LaunchBar works more like the way I think.
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