[cyber]

все поправил target и перевалил http://cyberua.16mb.com/drag&drop/ .
а проблему с высотой решил так

width_height:function( drop_elem){
		
		var width_drop, height_drop, height, width, height_drag, width_drag;
		
		 if(action.auto){
			  drop_elem.style.height = "auto"; 
			   action.auto = "stop";
		  }
		  width_drop = drop_elem.offsetWidth;
		   height_drop = drop_elem.offsetHeight;
		     
			 width_drag = drag.obj.offsetWidth + parseInt(getComputed(drag.obj).marginLeft);
			  width_drag +=  parseInt(getComputed(drag.obj).marginRight);
			   
			   height_drag = drag.obj.offsetHeight  + parseInt(getComputed(drag.obj).marginTop);
			   
			     height_drag +=  parseInt(getComputed(drag.obj).marginBottom);
				
				width = width_drop - width_drag * action.count;
			      height = height_drop - height_drag ;
				  
				  if(width <  width_drag && height < height_drag) action.auto = true;
				  
		  
		 }