#include "mc_tween2.as"
// if you don't have mc_tween, comment it out.

var startX:Number = 0; // original X position of item picked up
var startY:Number = 0; // original Y position of item picked up
var drawCollision:Boolean = true; // for debugging

box1_mc.onPress = function() { pickup(this, 1); };
box1_mc.onRelease = function() { dropoff(this, 1, box2_mc); };
//box1_mc.onRollOver = function() { rollover(this, 1); };
//box1_mc.onRollOut = function() { rollout(this, 1); };

function pickup(which_mc:MovieClip, intMC:Number):Void {
	which_mc.swapDepths(this.getNextHighestDepth()); // bring picked-up object to foreground
	which_mc.startDrag();
	startX = which_mc._x;
	startY = which_mc._y;
}

function dropoff(which_mc:MovieClip, intMC:Number, target_mc:MovieClip):Void {
	which_mc.stopDrag();
	
	if (isColliding(target_mc, which_mc)) // try removing the second parameter here.  See function for more details.
	{
		status_txt.text += "\ncollided";
		which_mc.slideTo(85, undefined, .5);
	} else {
		status_txt.text += "\nmissed";
		which_mc.slideTo(startX, startY, .5);
	}
}

function rollover(which_mc:MovieClip, intMC:Number):Void {
	status_txt.text += "\nrolled over";
}

function rollout(which_mc:MovieClip, intMC:Number):Void {
	status_txt.text += "\nrolled out";
}

function isColliding(target_mc:MovieClip, which_mc:MovieClip):Boolean 
{
	// If you do not send a "which_mc" this will assume you want to check on the mouse position (which will probably be within the target when the item is dropped)
	
	obj1_x = target_mc._x;
	obj1_y = target_mc._y;
	if (which_mc) {
		obj2_x = which_mc._x - Number(which_mc._width / 2);
		obj2_y = which_mc._y - Number(which_mc._height / 2);
	} else {
		obj2_x = this._xmouse - 1;
		obj2_y = this._ymouse - 1;
	}

	obj1_x2 = target_mc._width + obj1_x;
	obj1_y2 = target_mc._height + obj1_y;
	if (which_mc) {
		obj2_x2 = which_mc._width + obj2_x;
		obj2_y2 = which_mc._height + obj2_y;
	} else {
		obj2_x2 = 2 + this._xmouse;
		obj2_y2 = 2 + this._ymouse;
	}

	if (drawCollision == true) 
	{
		this.createEmptyMovieClip("rectangle_mc", 10);
		rectangle_mc._x = obj2_x; 
		rectangle_mc._y = obj2_y; 
		if (which_mc) {
			drawRectangle(rectangle_mc, which_mc._width, which_mc._height, 0x990000, 50);
		} else {
			drawRectangle(rectangle_mc, 2, 2, 0x990000, 50);
		}
	
		this.createEmptyMovieClip("rectangle2_mc", 11);
		rectangle2_mc._x = obj1_x;
		rectangle2_mc._y = obj1_y;
		drawRectangle(rectangle2_mc, target_mc._width, target_mc._height, 0x99FF00, 50);
	}

	if ((obj2_x > obj1_x) && (obj2_x2 < obj1_x2) && (obj2_y > obj1_y) && (obj2_y2 < obj1_y2)) {
		return true;
	} else {
		return false;
	}
	
}

function drawRectangle(target_mc:MovieClip, boxWidth:Number, boxHeight:Number, fillColor:Number, fillAlpha:Number):Void {
    with (target_mc) {
        beginFill(fillColor, fillAlpha);
        moveTo(0, 0);
        lineTo(boxWidth, 0);
        lineTo(boxWidth, boxHeight);
        lineTo(0, boxHeight);
        lineTo(0, 0);
        endFill();
    }
}

http://dl.dropbox.com/u/316550/code-AS2_drag-drop-collision.zip

CS4

AS2 Basic Drag-Drop Collision

ActionScript