Does the iPod appear in the lefthand pane of iTunes? (ie. is is mounted?"
Do you get any error messages when you try to drop the track on the iPod?
Do you have Automatic updating switched on or off in the preferences?
Can you drop any other tracks from iTunes onto the iPod?
Silly question, are you dragging from the playlist to the iPod in iTunes or dragging from the playlist to the iPod on the desktop?
I have a Mac g4, running OS 10.3.9, itunes 5, and have a 3rd gen 40gb ipod. I have recently purchased music from the itunes store, and can't drop it into my ipod. I figure i can always burn to cd - then re-import, but shouldn't my purchased music be able to download to my ipod easily?