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nice to have, but don't see myself ever using this feature. I normally just drop files into my drive-mapped Dropbox folder.
It's really nice if you're on a friend's computer and want to copy a file to your own Dropbox account.
I think that the main use comes from when you're not at your own computer. If you're at work or a friend's house, it'll be far simpler to just drag the file into the browser than to install dropbox.

I'm in that situation about four times a year and this will be a huge time saver compared to the old system.

Well, you know, you could upload from your browser before, too. While it is definitely a nice feature, it is not like it adds functionality...
None of Dropbox is new functionality that wasn't available before. Somehow they're a 4 billion dollar company.
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Ahhhhhh.

They really ought to state the customer use-case on-blog, I use Dropbox on only my own computers and didn't understand the point at all.

Hmm.. this is a really cool feature, but I think I saw it first on http://minus.com.
Plenty of sites let you drag from your computer into your browser to upload a file, including http://imgur.com (as featured on reddit).

Dropbox is a good case because it works incredibly well and people actually use it.

Is this particulary tricky functionality to implement?
To get it working in three modern browsers, no.

To get it working in all the browsers that your users use, it's trickier.

I was hoping it would do something seriously trick (that I have no idea how to implement) and ask the local client to upload instead of a pedestrian HTTP upload.

Still cool.

That might be possible to implement, actually. Just like how clicking on facebook spotify 'listen with' links now plays the song in the _spotify_ app, there may be a way on the server to control what the client does...
The client has a permanent connection to the server, but in this case the server doesn't necessarily know what client it's on, and some of us have our browsers configured to be pesky (with a dialog box indicating the URL and target app) about sending URLs to different apps.
While I haven't used facebook spotify, links to the itunes store can launch itunes.
Yeah, a lot of apps can do this.
On Windows at least, this requires a registry entry to associate the application with the new "protocol". Steam does this as well to launch games and so forth with "steam://foo"
A custom protocol wouldn't strictly be necessary. You could have the browser tell the server the path of the dropped files then have the server instruct the native client to fetch and upload those files.

However the File object hides the full path from the JavaScript code for security reasons (see https://developer.mozilla.org/en/DOM/File). I assume most dropped files would contain the user's home directory and therefore account name in the path.

maybe they should change their name to draganddropbox?
Not that this isn't nifty, but hasn't drag and drop been a standard UX fixture since 1984? The fact that drag and drop is a standout feature adds fodder to the argument that the web is an immature platform who's functionality doesn't parallel that of native applications.
They also doubled the referral bonuses today! It was 250MB/referral, and it's now 500MB.
And it is also now that you can get in retrospect the referral bonuses.
The double referral bonuses have been available for college students (anyone with a @.edu or equivalent email address) for quite a while. Glad to see it's available for everyone now!
The part that gets me there is that paid users got doubled to 1GB instead of the 500MB and EDU users got no benefit from the bump. (It's free, so I'm not complaining very loudly)