|I did get to the bottom of my XDND woes, and let me just say this. I shouldn't be coding after 10pm... I just don't think straight ;)
I've got the 'dropping' side working. Now on to the 'dragging' side of the equation. Give me a week or so and I should be getting another Linux release ready. I must say, I'm pretty happy with the DND architecture, now thats it's much easier in LGI I'll use it more in my apps.
Also I've completely ignored the X focus and implemented my own focus. Mainly because X does weird things with keyboard focus that I can't work around. This fixes issues with controls repainting unnecessarily.