can not click and drag

All of a sudden I cannot click and drag to highlight text, to move a photo, or to crop an image. This is a problem in Microsoft Word, email, Adobe Photoshop etc, therefore I think it is a windows 7 issue.

GiniNZoe, try this
This sounds too simple to work, but it worked for me:

1) Find an affected icon.
2) Click and HOLD the icon with the Left mouse button.
3) Press Esc while holding the Left mouse button.

Or this if the other did not fix it

Check to see if your taskbar is "Locked", if that's not the case right click
on the taskbar go to properties, click the start menu tab, then the
customize button, then the advanced tab, and then in the box directly under
Control Panel you will see "Enable dragging and dropping" make sure that's
checked ON.

I tried both, did not work. When I went to Properties, etc. the 'enable context menus and dragging and dropping' was already checked.

Did this possibly start soon after one of M$ bad updates was installed?

I wondered about that, went to my Windows Update and, for some reason, no updates were done since September. I normally get notices about updates and then decide when to do them. I then did the updates, but that did not change anything. I do appreciate your help.

Last thing I myself would try, up to you if you do it. Device Manager, delete mouse and reboot. It will find it and reinstall it's driver.