Ah, you're right about the drag-and-drop. It does work for me, I just didn't know it was there. You could probably make that transparent just by adding a little line to make that look like a title bar, so people recognize it as something you can drag around.
As for the block-swapping, I was thinking either the click-one-and-then-the-other method or the drag and drop method would work. I personally would prefer the drag-and-drop just because it feels a little more intuitive for me, but I also figured that it might be harder to implement.
New general game hitch, though: I'm getting all kinds of glitches trying to change my resolution. That's likely to be a macbook thing, I'll pin down exactly what the symptoms are and put it in a bug rept. I only bring this up because if I could push up to a slightly higher resolution the window would be out of the way, as you can see it's currently just a little awkwardly big on my screen.
Oh, I had another idea I forgot to mention: while the drop-down block select, direction select, special block select thing works pretty well, I actually found myself wishing for a kind of palette, at least for the color blocks. I'm thinking a color palette as small icons in a grid to the right of the "current block" pane (you could do a 3x3 or something), and just spacing out the drop-downs for direction and special blocks.
Also, while using the arrow keys for navigating around the grid is not a bad idea (are you planning to give it the option of a keyboard-only interface at some point?), I would actually prefer the arrow keys be hotkeys for the direction of the block you're placing. Obviously this is suboptimal for the bidirectional blocks, but for your standard up/down/left/right blocks I think it would be just a little quicker.