Dragging and Dropping No Longer Works

This problem typically presents itself in Windows XP when upgrading to SP3.

Things that work!
Can drag out of Recycle Bin to desktop without problem.
Can drag web link from address bar to desktop to make shortcut without any problem.
Can drag a file into notepad and open it.
Can drag icons to the start menu without any problems.
Can right click and copy and past without any problems.

Things that do not work
Can’t drag a file to a folder.
Can’t right click drag (no menu will show)
Holding down Ctrl while dragging will show plus sign but does not work.
And while I drag the, ghost icon appears as normal, with the cursor.  But just does not copy, or move the file as expected.

There might be a variety of things that shift between the columns but these are some of the common issues I’ve seen.

The fix:

The issue becomes that an Internet Zone policy is being checked, but the registry key doesn’t exist for it. No registry entry, no policy, so no authorization to drag and drop.

In regedit, go to HKEY_CURRENT_USER/SOFTWARE/Microsoft/Windows/CurrentVersion/Internet Settings/Zones/4.
If there isn’t an entry named 180D, then create a new DWORD entry named 180D and set the value to 0.

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