I vaguely remember someone else mentioning not being able to do drags in the past. 1.03 is the latest fully stable release, so you may as well give it a try. Drag and drop definitely works in 1.03 and all 2.0 betas released to the public.

When you drag a single folder to emplode (regardless of its contents), it will create a playlist. Anything inside that folder also gets brought over. Other folders make other playlists and any mp3s get added as tracks. Just like copying things in Explorer.

Bruno