I’m facing the same issue! Downloaded WP 3.1, installed a theme and some plug-ins, came across this issue of not being able to select/move any of the widgets.
I reverted to default theme and deactivated all the plugins, but the issue still persists.
Earlier, during a different WP install (2.8, I think) I had a similar issue when working with Chrome, but when I switched browsers it seemed to work. Unfortunately, this doesn’t seem to be the case here.
Any other suggestions??
Thank you!