How can a Rendering determine if Content Markers are showing?

Valid for Sitecore 5.2, 5.3

Access the ShowEditDots property of the Sitecore.Context.State object:

<xsl:variable name="showdots" select="sc:GetState( 'ShowEditDots' )" />

<xsl:if test="$showdots = 'true'">

<sc:dot select="..">Edit Parent</sc:dot>

</xsl:if>