This is a very basic drag-and-drop; it's mostly a proof of concept. The action is a bit stilted, especially on the Android, and when you drag the element beyond the page borders and then back to the centre, the action looks a bit odd.
It might be useful to restrict the drag to the canvas that's shown naturally, and prevent it from stretching up.
Still, this is an extremely simple script that I put together in under an hour, including solving a few minor problems.
It also works on normal desktop browsers, as well as on the S60 Widget Manager (Opera-based). Use this widget. Other phone browsers should not support it because they don't support the right events.
See also the multitouch drag-and-drop.
The touchstart event has bubbled up to the document.