I can't drag and drop?...

Yep. It's checked.

Thanks, mdahouse. My ESC key WAS stuck in the down position due to some crumbs. Solved all my problems, including boot-up problems.

Thanks for your help. I discovered that Texter from lifehacker.com was the problem.

The escape key was stuck down on my keyboard too, thanks for posting that 'way-too-obvious-for-me-to-think-of' solution. :)

I just wanted to add a Thank You to the ESC key stuck comment. Brand new laptop and not being able to drag and drop drove me nuts the last two days!

I have this problem off and on. I'm uder the impression that it's caused by VMware. It started happenng after I got it (version 7), and it only ever seems to show up after I start draging files to and form VMs.

Tying the last two posts together, I'll add I too experienced an inability to drag/drop anything on my Windows 7 PC, but that arose shortly after I'd launched Virtual Box. However, I'd long since closed Virtual Box and the problem persisted until....yep....I press the ESC key. So, thanks to mdahouse for steering me in that direction. No kekyboard crumbs but something surely locked up the ESC key, leaving Virtual Box as the supsect....and this seems vaguely familiar.