RIGHT click on the bottom taskbar, choose "Properties", then click on the "Start Menu" tab. When that loads, click on the active "Customize" button next to the Start Menu you have selected/ticked.. When that loads, scroll through the options and make sure there's a CHECK mark next to "Enable Dragging and dropping". Click on OK, then Apply, then OK.
Or read the information and the ZIP reg fix in the link below:
http://tenmov.es/2008/10/16/how-to-fix-drag-and-drop-problems-in-xp/
Hope this helps.
Grif
XP professional Dell dimension 8400
after a reformat and all updates incl service pack 3 and IE 8 I can no longer drag and drop...
I have tried the fix.reg...didn't work...I can drag a program from my desktop to the task bar. Can't drag and drop from among folders in desk top and my doc or program files...
I can cut and paste...
I really want my drag and drop back...Please help...

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