It seems like drag and drop upload widgets disappeared from the face of Web 2.0. The last one of these I remember using was an activex widget, and inability of using it in anything other than IE doomed it. Have you used or seen one of these recently?
The Dojo Toolkit JavaScript library supports some drag & drop functionality that I've seen work in IE6+ and FF2+. The nice thing about Dojo and other JS libraries is that they abstract away all of the browser detection stuff.
I'm sure other JS libraries support this functionality.
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