Bonnie,
Thanks for the code Bonnie. I should have waited until you posted before I started coding :)
I got the mock-up app done using two different methods: 1st I did the object moving only using the object's MouseUp event, this worked nice (just 1 line of code) but all the cursor changing and stuff was missing. Then I used the drag and drop method (very similar to your code below) and it works very nice.

Draging object around on a "designer" surface without any type of snapping really sux!! lol

If you stumble accross something about "snapping" please let me know.

Thanks,
Einar