"Show windows contents while dragging" option is disabled after a restart
If you have a Dell PC, then the problem is most likely due to "Dell User Experience" utility. Check with Dell Technical Support to sort out this problem.
Dell Community forum - Software - Windows XP - Show window contents while dragging:
http://forums.us.dell.com/supportforums/board/message?board.id=sw_winxp&message.id=104214
Workaround: Use this tiny utility (created by David Candy), and place it in the Startup folder. It enables the "Show windows contents while dragging" on every restart. Get the utility from here