Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ActivityComponent.mxml
===================================================================
diff -u -r6e5ccfe79a68a32552f0fea8fa7d2e375d1e6afe -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ActivityComponent.mxml	(.../ActivityComponent.mxml)	(revision 6e5ccfe79a68a32552f0fea8fa7d2e375d1e6afe)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ActivityComponent.mxml	(.../ActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -132,7 +132,7 @@
 		        	activityComponent.mouseOffSetX = point.x;
 		        	activityComponent.mouseOffSetY = point.y; 
 		        	
-		        	DragManager.doDrag(activityComponent, ds, event, AuthorUtil.getImage(activityComponent), 0, 0, 1.0, false);
+		        	DragManager.doDrag(activityComponent, ds, event, AuthorUtil.getImage(activityComponent.getChildAt(0)), 0, 0, 1.0, false);
 		        	activityComponent.visible = false;    
 		        } 
 			}
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/CombinedActivityComponent.mxml
===================================================================
diff -u -r3444f7cd21be73f0284515ef8f821ad9320b54a0 -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/CombinedActivityComponent.mxml	(.../CombinedActivityComponent.mxml)	(revision 3444f7cd21be73f0284515ef8f821ad9320b54a0)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/CombinedActivityComponent.mxml	(.../CombinedActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -36,7 +36,7 @@
 	</mx:Script>
 	
 	<mx:VBox id="vbox" verticalAlign="middle" horizontalAlign="center" borderStyle="solid"
-		dropShadowEnabled="true" shadowDirection="right" cornerRadius="10" minWidth="70" minHeight="50"
+		dropShadowEnabled="true" shadowDirection="right" cornerRadius="4" minWidth="70" minHeight="50"
 		backgroundColor="#C2D5FE" paddingTop="3" paddingBottom="3" paddingLeft="5" paddingRight="5"
 		verticalGap="0"
 		>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/OptionalActivityComponent.mxml
===================================================================
diff -u -r3444f7cd21be73f0284515ef8f821ad9320b54a0 -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/OptionalActivityComponent.mxml	(.../OptionalActivityComponent.mxml)	(revision 3444f7cd21be73f0284515ef8f821ad9320b54a0)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/OptionalActivityComponent.mxml	(.../OptionalActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -60,7 +60,7 @@
 		horizontalAlign="center"
 		paddingTop="5" paddingRight="5" paddingBottom="5" paddingLeft="5"
 		backgroundColor="#C2D5FE" verticalGap="2"
-    	borderStyle="solid" cornerRadius="10" dropShadowEnabled="true" shadowDirection="right"
+    	borderStyle="solid" cornerRadius="4" dropShadowEnabled="true" shadowDirection="right"
 		minWidth="90" minHeight="100"
 		dragEnter="dragEnterHandler(event);" 
     	dragDrop="dragDropHandler(event);" 
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ToolActivityComponent.mxml
===================================================================
diff -u -r3444f7cd21be73f0284515ef8f821ad9320b54a0 -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ToolActivityComponent.mxml	(.../ToolActivityComponent.mxml)	(revision 3444f7cd21be73f0284515ef8f821ad9320b54a0)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ToolActivityComponent.mxml	(.../ToolActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -39,7 +39,7 @@
 		]]>
 	</mx:Script>
 	<mx:VBox id="vbox" verticalAlign="middle" horizontalAlign="center" borderStyle="solid"
-		dropShadowEnabled="true" shadowDirection="right" cornerRadius="10" minWidth="60" minHeight="50"
+		dropShadowEnabled="true" shadowDirection="right" cornerRadius="4" minWidth="60" minHeight="50"
 		backgroundColor="{activity.tool.bgColour}" paddingTop="3" paddingBottom="3" paddingLeft="5" paddingRight="5"
 		verticalGap="0" toolTip="{(isTitleShown)? undefined : activity.title}"
 		>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/group/GroupActivityComponent.mxml
===================================================================
diff -u -r3444f7cd21be73f0284515ef8f821ad9320b54a0 -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/group/GroupActivityComponent.mxml	(.../GroupActivityComponent.mxml)	(revision 3444f7cd21be73f0284515ef8f821ad9320b54a0)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/group/GroupActivityComponent.mxml	(.../GroupActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -25,7 +25,7 @@
 		borderStyle="solid"
 		dropShadowEnabled="true"
 		shadowDirection="right"
-		cornerRadius="10"
+		cornerRadius="4"
 		backgroundColor="#C2D5FE"
 		minHeight="50" minWidth="60">
 		<mx:Image source="@Embed(source='assets/icons/group.png')" />
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/toolbar/SystemToolComponent.mxml
===================================================================
diff -u -r3444f7cd21be73f0284515ef8f821ad9320b54a0 -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/toolbar/SystemToolComponent.mxml	(.../SystemToolComponent.mxml)	(revision 3444f7cd21be73f0284515ef8f821ad9320b54a0)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/toolbar/SystemToolComponent.mxml	(.../SystemToolComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -10,6 +10,10 @@
 			// This is just fro grouping, 
 			public var groupingType:int;
 			
+			// Point of mouse during drag
+			public var mouseOffSetX:int;
+			public var mouseOffSetY:int;
+			
 		]]>
 	</mx:Script>
 </mx:Button>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/toolbar/ToolBar.mxml
===================================================================
diff -u -r3444f7cd21be73f0284515ef8f821ad9320b54a0 -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/toolbar/ToolBar.mxml	(.../ToolBar.mxml)	(revision 3444f7cd21be73f0284515ef8f821ad9320b54a0)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/toolbar/ToolBar.mxml	(.../ToolBar.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -90,8 +90,15 @@
 	          			break;
 	        	} */
 	        	
+	        	// Need to get stage coords and convert since localX,Y is returning wrong values
+	        	var point:Point = new Point(event.stageX, event.stageY);
+	        	point = dragInitiator.globalToLocal(point);
+	        	
+	        	dragInitiator.mouseOffSetX = 40;
+	        	dragInitiator.mouseOffSetY = 30;
+	        	
 	        	ds.addData(activityComponent, "dragActivity");  
-	          	DragManager.doDrag(dragInitiator, ds, event, activityComponent, 25, 15, 1.00, false);
+	          	DragManager.doDrag(dragInitiator, ds, event, activityComponent, - point.x + 40, - point.y + 30, 1.00, false);
 	        }
 			
 		]]>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/controller/AuthorController.as
===================================================================
diff -u -r6e5ccfe79a68a32552f0fea8fa7d2e375d1e6afe -r2aa362fa3ab4a8226745005fce896c82f7a03309
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/controller/AuthorController.as	(.../AuthorController.as)	(revision 6e5ccfe79a68a32552f0fea8fa7d2e375d1e6afe)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/controller/AuthorController.as	(.../AuthorController.as)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
@@ -13,7 +13,6 @@
 	import org.lamsfoundation.lams.author.components.LearningLibraryEntryComponent;
 	import org.lamsfoundation.lams.author.components.activity.*;
 	import org.lamsfoundation.lams.author.components.toolbar.SystemToolComponent;
-	import org.lamsfoundation.lams.author.components.transition.TransitionComponent;
 	import org.lamsfoundation.lams.author.model.activity.GroupActivity;
 	import org.lamsfoundation.lams.author.model.learninglibrary.LearningLibraryEntry;
 	import org.lamsfoundation.lams.author.util.Constants;
@@ -129,14 +128,24 @@
             } else if (event.dragInitiator is LearningLibraryEntryComponent || event.dragInitiator is SystemToolComponent) {
             	// Adding a new activity to the canvas
             	
-            	var learningLibraryEntryComponent:LearningLibraryEntryComponent = event.dragInitiator as LearningLibraryEntryComponent
-            	
             	// Get the next UIID
 				var nextActivityUIID:int = generateUIID();
 				
-				var newActivityComponent:ActivityComponent = ActivityComponentFactory.getActivityComponentInstanceFromDrag(learningLibraryEntryComponent, nextActivityUIID);
-	           	newActivityComponent.rootActivity.xCoord = currentMousePoint.x - learningLibraryEntryComponent.mouseOffSetX;
-	           	newActivityComponent.rootActivity.yCoord = currentMousePoint.y - learningLibraryEntryComponent.mouseOffSetY;
+	           	// Get the offset point to place the activity
+	           	var point:Point = new Point(0,0);
+	           	if (event.dragInitiator is LearningLibraryEntryComponent) {
+	           		var learningLibraryEntryComponent:LearningLibraryEntryComponent = event.dragInitiator as LearningLibraryEntryComponent
+	           		point.x = learningLibraryEntryComponent.mouseOffSetX
+	           		point.y = learningLibraryEntryComponent.mouseOffSetY;
+	           	} else {
+	           		var systemToolComponent:SystemToolComponent = event.dragInitiator as SystemToolComponent
+	           		point.x = systemToolComponent.mouseOffSetX
+	           		point.y = systemToolComponent.mouseOffSetY;
+	           	}
+	           	
+	           	var newActivityComponent:ActivityComponent = ActivityComponentFactory.getActivityComponentInstanceFromDrag(event.dragInitiator, nextActivityUIID);
+	           	newActivityComponent.rootActivity.xCoord = currentMousePoint.x - point.x;
+	           	newActivityComponent.rootActivity.yCoord = currentMousePoint.y - point.y;
 	            canvasBox.addChild(newActivityComponent);
 	            selectActivityComponent(newActivityComponent);
 	            activities[nextActivityUIID] = newActivityComponent.rootActivity;