It all depends... When you want a loud harsh sound out of your guitar, hold the pick tightly... When you want a softer more delicate sound, hold the pick loosely.

Being able to adjust the way you pick on the fly is a big part of playing and it adds a lot of versatility to your playing. The best advice for the way you hold your pick and the way you strum is just to practice and see what feels best for you. The more you play and the more you do it the easier it will be and the quicker you'll find out what works for you and what doesn't.

I know that's not a definite answer that you were probably looking for. I know there are tons of books and stuff out there that will tell you what they think is the "wrong way" and the "right way" to do things... People always use those terms about technique. I look at it from a functional perspective. As long as you get the sound you're looking for it doesn't matter how you're playing it. Obviously there are better ways to do that allow for faster changes between soloing and strumming but those lessons are best found on your own... That, and they're hard to explain without illustration.