Unable to arrange Dock icons on my new Macbook Air

On my iMac (about a year old and updated to Snow Leopard and its patches as they came out), I dragged the right side Dock Icons (applications) to be in the order I find easiest to work with. As long as I start moving the icon before it times out and displays all the windows of that App (new to Snow Leopard I believe). I have to be careful that the icon remains on the Dock or it is deleted when I drop it.

However with my new MacBook Air, it won't drag the icons. If I click on an icon for the necessary time it will display windows of that app just as the iMac does. But I cannot rearrange the icons. I think the only difference between the set ups I've found is that usually the MacBook I have auto-hide for the Dock and iMac it is displayed all the time. However, I've changed that and it didn't fix the problem.

Any idea?

Thanks,
Bruce