I have a MacBookPro, with a Magic Mouse attached. Suddenly, I'm not able to drag and drop using either device.
I can select an item and drag it, but not drop it anywhere. I eventually have to hit escape, and then the object returns to its original position.
Also, this problem is not limited to the Finder. PS, Transmit, Mail, and a host of other apps all demonstrate the same behavior.
So far, I've:
Zapped the PRAM. Repaired Hard Drive and Permissions (no problems found). Trashed the mouse preferences.