Symptom
An item can be selected within an application, such an email message in the Mail application, but you cannot drag or arrange it. This may also be seen in the language list in System Preferences, and potentially other lists in the system.
Note: Software developers may create applications for Mac OS X to run in environments that include Classic, Carbon, and Cocoa. This issue may only affect applications designed for Cocoa.
Solution
Turn off Num Lock. This is done by pressing the Num Lock key while pressing and holding the Shift key.