To be honest, I've yet to find any consistency in how application icons are moved from one group to the next...each of the suggested solutions here have worked for different program icon groups...ie. I was able to move one program by dragging the application icon over the folder icon...nothing else would work; in a second scenario, I had to drag the application icon into the white space as suggested above; so far, in a third case what worked was a quick double-click and drag ontop of the group name???

As barqer says, "Make of it what you will"

Other than these strange little issues here and there, this little device is proving itself more and more awesome each day!