I had this problem with the pro demo version and after upgrading the lite to 1.8.0.12 it's back again.
When I try to drag a folder to a program like eg: font suitcase all i get is a crossed circle. I also get it with dragging files to the recycle bin on the desktop.
Dumb suggestion, but have you tried a full restart (Sleep/Logoff doesn't count) of windows recently? That can often help resolve misaligned shortcut links. Just guessing, as you can tell.