It depend on your current "coordinate accuracy mode". If it is set to "Integral coordinates", you can only rotate in 90-degrees steps. Setting it to "Arbitrary coordinates" will allow you to rotate at will. You can change the mode in the toolbar above the image.
Custom Rotation Using Mouse
Product: RWPaint
Rotating the selected object (say rectangle or ellipse) using the 'dot and arc' handle should rotate it as per the mouse direction.
Currently, it rotates it by 90 degrees. I have to use 'Custom Rotation' to get it to whatever angle I want - this is really cumbersome.
I vaguely remember this was working before (not too sure) and now it is not - i.e. when I first downloaded the app and it was a virgin installation.
I tried reinstalling but it is still the same.