We investigate two-photon, selective excitation of diatomic molecules with intense, ultrafast laser pulses. The method involves transfer of a vibrational population between two electronic states by shaping of light-induced potentials (LIPs). Creation and control of the LIPs is accomplished by choosing pairs of transform-limited pulses with proper frequency detunings and time delays. Depending on the sequence of pulses (intuitive or counter-intuitive) and on the sign of the detuning (below or above the first transition) four schemes are possible for population transfer by LIP shaping. We develop a simple analytic model to predict the optimal laser pulses, and to model the adiabatic dynamics in the different schemes. Based on a harmonic, three-state model of the sodium dimer we demonstrate numerically that all four schemes can lead to efficient, selective population transfer. A careful analysis of the underlying physical mechanisms reveals the varying roles played by the adiabatic and diabatic crossings of the LIPs. The detailed mechanisms influence the robustness and experimental applicability of the schemes.