Win ME is a particualarly sensitive OS. It sounds like a dll file that is associated with drag and drop function has been corupted. I am not sure which file this might be. Even though you uninstalled the programs (hopefully you used the programs own unistall program) the dll still has been altered. You can do 2 things:
1) Search Microsoft site for dlls and drag and drop functions or another site that is really easy to search- a great site as a matter of fact is www.techadvice.com- it's free
or 2) Reinstall WinME into the same folder as it was this will repair system files- If the disk you have is a full OEM version delete these two files Winver and Win.com- make sure you have the CD Rom in your drive and a bootable floppy disk(Win 98).As long as you install it exactly into the same folder as it was before it will install like an upgrade-all your other files and programs will remain the same. This second choice is a last ditch effort if all else fails. I hope this helps-Good luck.
Oh by the way, like I said Win ME is a very sensitive OS before installing any new programs always make sure to go to the Web site of the company that made the program to see if there are patches for the program-even though the program might say made for ME issues do arise.