All I can say is what I see, and it drags and drops fine without any problems for me at all. I dragged and dropped to a new folder, it worked. I dragged and dropped it back to its original folder, and it worked.

I'm using the latest version of OS 2008, and the only app in the background is Skype.

EDIT: I've just tried it again and it still works absolutely fine for me, I can't reproduce any of the problems mentioned in posts above. The dragging and dropping worked fine when I dropped on the folder icon itself and when I dropped on the text next to the folder icon.