Michelle,

I just put a Listview and Textbox on a form, set them to DragMode - Auto and had this code in the Form.Click:

do case
   case this.tag = "1"
      lcX = "ARW05LT.ICO"
      this.tag = "2"
   case this.tag = "2"
      lcX = "DRAGCOPY.CUR"
      this.tag = "3"
   case this.tag = "3"
      lcX = "H_MOVE.CUR"
      this.tag = "4"
   case this.tag = "4"
      lcX = "ARW03LT.ICO"
      this.tag = "5"
   case this.tag = "5"
      lcX = "4WAY01.CUR"
      this.tag = "1"
endcase

with this
   .olecontrol1.DragIcon = lcX
   .Text1.DragIcon = lcX
   .Caption = lcX
endwith

The cursors and icon were copied to the project folder, I set the DragIcon on the property sheet to the h_move.cur and built an exe. If I run the exe and drag either control the pointer changes. Click the form and drag and can see the change. I did not have any of the graphics files in the project.

I copied the exe to another folder and ran it. This time on the first drag of the icon it worked. After clicking the form and doing a drag it behaved like showing the control outline. This was because the exe could not find the graphics files. I then copied the graphics to the folder where the exe was located and the mouse pointer changed appropriately. So it does work for me both at dev time and runtime provided that the images are in the right place.