Dear Claire,
I've just tested with Firefox 4.0.1 on Moodle 2.0.3+(Build 20110511) with theme Arialist and it works! I was able to move labels around within the same topic, between topics and around tasks.
I'm using PHP 5.3.3 on an Apache web server (2.2.16) with MySQL (5.1.50) on Windows 7 Ultimate 64 bit SP1 build 7601.
Regards,
Gareth