I had a huge problem using drag & drop in the My Computer view. This happened once a few versions ago, and I just upgraded to 10.0.107 to see if it would happen again (it did).
Specifics: In the My Computer view, I dragged one of my music sub-folders consisting of wav files from one directory to another (at the same level, if it matters). MC replied:
Cannot remove folder Christmas in the Aire: It is being used by another person or program. Close any programs that might be using the file and try again.
After I OK'ed that error box there came another:
Media Center failed to move the folder. This usually happens when files inside the folder are in use by other programs.
No, it definitely wasn't in use by anyone else. I brought up Windows Explorer and say that the files had indeed been moved into the newly created directory, but the old one wasn't removed.
If I go back to the media library, I see that the file name has not been updated; if try to play any of the files, MC complains:
Media Center was unable to play any of the files in the playlist. Please make sure that the path in Media Library points to the right location.
So I tried using Find & Replace to fix the Filenames. MC complained "Failed to update the following files: {the 12 tracks in question} This can happen when files are missing, in use, read-only, or corrupt." All the file names got changed to the new directory, but a "(1)" was inserted in the file name (e.g., "H:\Music\New Age\Christmas in the Aire\01 - Joy to the World (1).wav"), so MC still can't find them. It also reported that the operation left empty folders, should I remove them? To which I said yes, but the empty folder remained. And I can't remove the "(1)"! Even if I manually edit the Filename field, removing the "(1)", it doesn't change -- MC just gives that "Failed to update the following files" message again.
Closing and restarting MC revealed file names without the "(1)" and they play fine now. At this point, I could also remove the old, now empty directory using Windows Explorer. I'm sorry didn't try doing that earlier, since it might have revealed pretty conclusively that it was MC that was holding on to the directory.
This bug is not terribly repeatable. I never had the problem when dragging & dropping folders of MP3 files, though I can't tell if that's relevant, since sometimes I succeed with folders of wav files, too. The closest I got to the error above happened twice, when moving another directory of wav files: I got the complaint about unable to remove directory, but this time the file names were properly updated. This time I did remember to try removing the directory from Windows Explorer, and it agreed it was busy. Closing MC allowed Windows Explorer to remove the directory, so it seems pretty clear that MC was the culprit.