Widget functionality – a bug or "feature"?

I believe you are buggy. Everything still works the way it did prior to the upgrade for me, drag/drop, dropdown, etc

Okay, well I deactivated/reactivated all plugins and it did not correct the problem. PHP & MYSQL meet requirements.

(Moderators, if you want to move this to another category now that would be great)

Did you also try switching to twentyeleven theme? A few themes are surfacing which aren’t 3.2 compatible

Did you try changing to the default theme?

A couple themes (Koi for one) is screwing up those options.

I don’t want to change the theme, or I’ll lose all of the widget content. I designed the theme myself, the only thing I have in there that references anything other than the content is the functions:

if (function_exists('register_sidebars')) {
    	register_sidebars(3, array('name'=>'Sidebar %d'));
    }

has that been depreciated?

No, that should be fine.

But if you’re unwilling to TRY another theme, then try just renaming functions.php to functions.OLD

Remember, the functions file acts like a mini plugin, so you can TOTALLY hose yourself in unexpected ways.

I don’t want to change the theme, or I’ll lose all of the widget content.

No, you won’t. Your Theme-specific Widget settings are stored in the database. If you switch Themes, and then switch back, all of your previous Widget content will still be there.

I designed the theme myself, the only thing I have in there that references anything other than the content is the functions:

The Widgets functionality isn’t your problem; rather, jQuery is the likely culprit. From what you describe, the WP-Admin area is having some issues that are normally script-related, causing the script-powered Widget drag-and-drop not to work.

Where – and most importantly, how – are you enqueueing jQuery (or similar scripts)?

Here is what is loading on the widgets page:

<script type="text/javascript">
//<![CDATA[
addLoadEvent = function(func){if(typeof jQuery!="undefined")jQuery(document).ready(func);else if(typeof wpOnload!='function'){wpOnload=func;}else{var oldonload=wpOnload;wpOnload=function(){oldonload();func();}}};
var userSettings = {
		'url': '/',
		'uid': '1',
		'time':'1310053175'
	},
	ajaxurl = '/wp-admin/admin-ajax.php',
	pagenow = 'widgets',
	typenow = '',
	adminpage = 'widgets-php',
	thousandsSeparator = ',',
	decimalPoint = '.',
	isRtl = 0;
//]]>
</script>

There are a couple other references to jQuery on the widgets page, they are in wp-admin/load-scripts.php

Odd thing is, I upgraded another site without a problem at all. :/

Clear your browser cache. Seriously. Sometimes browsers love to hang on to old javascript libraries…

Nope, that didn’t do it.

Also, I did switch over to twenty-eleven and went to the widgets panel – same same.

Also, I did switch over to twenty-eleven and went to the widgets panel – same same.

You switched to Twenty Eleven and deactivated all Plugins?

1. deactivated plugins
2. switched to twenty-eleven.
3. Cleared cache.
4. went to widgets panel

same result. No drag & drop, widgets open in a new page.

I just did the auto-reinstall as well. No luck.