I sadly don’t have a solution, in fact, I’m experiencing exactly the same problem on my fresh installed 2.1 WP, I suppose they delivered the wrong scriptversions with this release or so. The errors (given by Firebug) are the following:
Element.childrenWithClassName is not a function
https://techdump.leftblank.nl/wp-includes/js/scriptaculous/dragdrop.js?ver=1.6.1
Line 640
and
Element.childrenWithClassName is not a function
https://techdump.leftblank.nl/wp-includes/js/scriptaculous/dragdrop.js?ver=1.6.1
Line 234
Both these errors are in the ‘dragdrop.js’ file; I’ve tried older versions, back to 1.5 of scriptaculous, but none of them worked.
Hopefully someone knows how to fix this as it’s pretty annoying, I want to enjoy the goodness of widgets as well!