We're using the WP Dashboard editor to edit both pages and posts. When the editor window is in "Visual" mode it seems like we should be able to drag and drop images to re-position within the text.

But, we're having all sorts of problems with the images and their captions becoming unattached and the like.

Is there a correct order in which things must be done or are we just crazy to think that the WP editor is up to this level of fine-grained formatting?

BTW -- should we be looking at some kind of plugin or something that would provide the increased capabilities we need?

I am not sure if tinyMCE can do this, I think not. There is http://wordpress.org/extend/plugins/tinymce-advanced/ (which probably doesn't do it either) but some users had problems with it & Atahualpa, but at least 3 or all were able to fix them it seems http://forum.bytesforall.com/showthread.php?t=513 post #20

Also, the browser interacts a lot with tinyMCE and tinyMCE is a bit sensible and will work better/worse depending on which browser you use. There are even differences between modern browsers. I cannot tell you which one works best but on the odd chance that you're using something like IE6 you should switch to a new Safari or Firefox.

(This will probably not enable drag drop though)

I suggest cut & paste instead of drag & drop, that should work.

I have the advanced version, and no, it doesn't let you drag and drop, unfortunately. I've tried it in Firefox and Safari on the Mac and MSIE on a PC.

This would be a great enhancement at some point.

I do use the Scissors plugin, which allows a bit more customization at the point where you are uploading an image. And the Image Shadow plugin, which lets you put a nice, subtly colored drop shadow around your images.