Try moving the files in List or Detail view. There may be a problem with your thumbnail cache. And as others said, try System Restore if possible. A last resort is to wipe and reinstall Windows XP.

try updating?

Hmm try to uninstall sp3 i did but i had few problems after i did.. best thing is to do is reinstall to sp2 but sp3 final is out i'm using it runs perfect for me.

I doubt this is a software configuration mishap or a matter of corrupted or altered files. I run a clean install of Win XP SP2 with IE7 installed (never used). System has all important apps run sandboxed, and no viruses or spyware. I have the same problem with the crashing when dragging and dropping. It's probably just a major bug that Microsoft doesn't bother to fix for some reason. It seems to happen if you haven't dragged anything around for awhile, but then stops happening for a little bit after you get a crash. Its very annoying.. Probably one of my major issues with XP. Still way better than crappy vista though.

-reply by crashpax

I doubt this is a software configuration mishap or a matter of corrupted or altered files. I run a clean install of Win XP SP2 with IE7 installed (never used). System has all important apps run sandboxed, and no viruses or spyware. I have the same problem with the crashing when dragging and dropping. It's probably just a major bug that Microsoft doesn't bother to fix for some reason. It seems to happen if you haven't dragged anything around for awhile, but then stops happening for a little bit after you get a crash. Its very annoying.. Probably one of my major issues with XP. Still way better than crappy vista though.

-reply by crashpax