I know this can be confusing, the trick is that if you drag a node to the RIGHT of another node's text title, the graphics will change to indicate that if you release you will drop and reorder it. You may want to enlarge the tree panel size a bit to make it easier.
I have to admit this is definitely a confusing thing, though once you get the hang of it it makes moving nodes pretty easy.
Let me know if you get it working.
