Marcelo gives a great coverage of Avalon’s drag and drop features over on his blog. If you are familiar with drag-and-drop in Windows Forms its not terribly different, which makes sense because Avalon has to work and play with existing Windows applications as well.
While Marcelo did put a big disclaimer around it, passing XAML through drag-and-drop does open up some interesting possibilities, if only you could think of a way to lock it down.