Yep - This is because of the upgrade to the latest prototype and scriptaculous. It works in FF2 but something is going on with all the others.
I will get this resolved asap.
It looks like we can only go to scriptaculous 1.7.1-beta3. Any version >= 1.8.0 breaks portal DnD in all browsers except FF2 ;)
We will stay on 1.7.1-Beta3 until we figure out if it's our js code or theirs: