I tested this out in Dreamweaver CS6, but in all cases the drag-and-drop was functioning properly.
If you create a new document using one of the included layouts (e.g. 3-column liquid) and insert an image in it, are you able to drag it around?
I believe that it might be due to the fact that I'm using XHTML strict. To test it out I created a new page and was able to use the drag-and-drop functionality, so I'm not positive what the reason. Is there a limitation when writing XHTML pages?
Wow, great support there Carey. Why answer the question then not respond again?!?! I found your software to not work as described. Then you tell me that it does and never follow up again? I've asked follow up questions and you haven't replied for over two weeks.