OMG people you have no idea how frustrating were the last several days.
I have a free version of BS Player under Win7 Home Premium and of course i use the DPI scaling (set to 133% because of big res.).
One day SUDDENLY drag & drop started to malfunction. All of the sudden when dragging a movie from the Explorer to the BS Player - the mouse cursor was jumping back as soon as you moved the dragged item to be within the BS Player borders. Weird!
Then i started to notice that other programs (like Winamp, Goldwave) are getting the same problem. At that point i was thinking that maybe Windows has a serious bug or a malfunctioning update.
Googling didn't help, and after some more trial and errors i FINALLY found the cause.
It's that little check-box in "Adjust screen resolution"->"Set custom text size (DPI)" called:
"Use Windows XP style DPI scaling".
So just a friendly advice, if you use this custom DPI feature - for God's sake keep that check-box CHECKED.