Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/CanvasBox.mxml
===================================================================
diff -u -r6e5ccfe79a68a32552f0fea8fa7d2e375d1e6afe -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/CanvasBox.mxml	(.../CanvasBox.mxml)	(revision 6e5ccfe79a68a32552f0fea8fa7d2e375d1e6afe)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/CanvasBox.mxml	(.../CanvasBox.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -82,9 +82,7 @@
 			
 			// Deselect the current activity
 			protected function click(event:MouseEvent):void {
-				if (event.currentTarget is ActivityComponent) {
-					AuthorController.instance.deSelectActivityComponent();
-				}
+				AuthorController.instance.deSelectActivityComponent();
 			}
              
 		]]>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ActivityComponent.mxml
===================================================================
diff -u -r2aa362fa3ab4a8226745005fce896c82f7a03309 -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ActivityComponent.mxml	(.../ActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ActivityComponent.mxml	(.../ActivityComponent.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -5,7 +5,7 @@
 	mouseOut="mouseOut(event)"
 	mouseMove="mouseMove(event)"
 	dragComplete="dragComplete(event)"
-	click="click(event)" 
+	click="click(event)"
 	>
 
 	<!--
@@ -65,14 +65,15 @@
 		    public function selectActivity():void {
 				// check the activity is loaded.
 		    	if (_activity.title != null) {
-		    		this.setStyle('borderStyle', 'solid');
-					this.setStyle('borderColor', '#66CCFF');
+		    		//this.setStyle('borderStyle', 'solid');
+					//this.setStyle('borderColor', '#66CCFF');
+					this.setStyle('backgroundColor', '#6699FF');
 					this.state = Constants.ACTIVITY_STATE_SELECTED;
 		    	}
 		    }
 		    
 		    public function deSelectActivity():void {
-		    	this.setStyle('borderStyle', 'none');
+		    	this.setStyle('backgroundColor', undefined);
 		    	this.state = Constants.ACTIVITY_STATE_NORMAL;
 		    	
 		    }
@@ -132,7 +133,7 @@
 		        	activityComponent.mouseOffSetX = point.x;
 		        	activityComponent.mouseOffSetY = point.y; 
 		        	
-		        	DragManager.doDrag(activityComponent, ds, event, AuthorUtil.getImage(activityComponent.getChildAt(0)), 0, 0, 1.0, false);
+		        	DragManager.doDrag(activityComponent, ds, event, AuthorUtil.getImage(activityComponent.getChildAt(0)), -3, -3, 1.0, false);
 		        	activityComponent.visible = false;    
 		        } 
 			}
@@ -150,8 +151,7 @@
 
 		    private function mouseOver(event:MouseEvent):void {
 				if (AuthorController.instance.uiState == Constants.UI_STATE_DRAWING && this.state != Constants.ACTIVITY_STATE_DRAWING && canAcceptTransitions) {
-					this.setStyle('borderStyle', 'solid');
-					this.setStyle('borderColor', '#66CCFF');
+					this.setStyle('backgroundColor', '#6699FF');
 					this.state = Constants.ACTIVITY_STATE_MOUSE_OVER;
 				}
 			}
@@ -160,7 +160,7 @@
 				
 				switch (state) {
 					case Constants.ACTIVITY_STATE_MOUSE_OVER:
-						this.setStyle('borderStyle', 'none');
+						this.setStyle('backgroundColor', undefined);
 						this.state = Constants.ACTIVITY_STATE_NORMAL;
 						break;
 				}
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/BranchPoint.mxml
===================================================================
diff -u -r09b7412b77d263dcb1f5dc6a0ff1609796bc1ebc -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/BranchPoint.mxml	(.../BranchPoint.mxml)	(revision 09b7412b77d263dcb1f5dc6a0ff1609796bc1ebc)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/BranchPoint.mxml	(.../BranchPoint.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -1,8 +1,9 @@
 <?xml version="1.0" encoding="utf-8"?>
 <ActivityComponent xmlns:mx="http://www.adobe.com/2006/mxml"
 	xmlns="org.lamsfoundation.lams.author.components.activity.*" 
-	verticalAlign="middle" horizontalAlign="center" horizontalScrollPolicy="off" 
-	paddingTop="3" paddingLeft="3" paddingRight="3" paddingBottom="3" height="30" width="30">
+	verticalAlign="middle" horizontalAlign="center" horizontalScrollPolicy="off"
+	paddingTop="3" paddingLeft="3" paddingRight="3" paddingBottom="3"
+	height="30" width="30">
 	
 	<mx:Script>
 		<![CDATA[
@@ -13,14 +14,12 @@
 		    }
 		]]>
 	</mx:Script>
-	
-	
-	
-	
+
 	<mx:VBox height="100%" width="100%"
 		verticalAlign="middle" horizontalAlign="center"
-		borderStyle="solid" dropShadowEnabled="true" shadowDirection="right"
-		cornerRadius="10" backgroundColor="#C2D5FE"
+		borderStyle="solid" shadowDirection="right"
+		cornerRadius="10" backgroundColor="#C2D5FE" 
+		dropShadowEnabled="{this != AuthorController.instance.selectedActivityComponent}"
 		>
 		
 	</mx:VBox>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/CombinedActivityComponent.mxml
===================================================================
diff -u -r2aa362fa3ab4a8226745005fce896c82f7a03309 -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/CombinedActivityComponent.mxml	(.../CombinedActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/CombinedActivityComponent.mxml	(.../CombinedActivityComponent.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -2,12 +2,13 @@
 <ActivityComponent xmlns="org.lamsfoundation.lams.author.components.activity.*" 
 	xmlns:mx="http://www.adobe.com/2006/mxml" 
 	verticalAlign="middle" horizontalAlign="center" 
-	horizontalScrollPolicy="off" 
-	paddingTop="3" paddingLeft="3" paddingRight="6" paddingBottom="3"
+	horizontalScrollPolicy="off"
+	paddingTop="3" paddingLeft="3" paddingRight="3" paddingBottom="3"
 	>
 	
 	<mx:Script>
 		<![CDATA[
+			import org.lamsfoundation.lams.author.controller.AuthorController;
 			import org.lamsfoundation.lams.author.util.Constants;
 			import org.lamsfoundation.lams.author.model.activity.CombinedActivity;
 			import mx.containers.VBox;
@@ -36,9 +37,9 @@
 	</mx:Script>
 	
 	<mx:VBox id="vbox" verticalAlign="middle" horizontalAlign="center" borderStyle="solid"
-		dropShadowEnabled="true" shadowDirection="right" cornerRadius="4" minWidth="70" minHeight="50"
+		shadowDirection="right" cornerRadius="4" minWidth="70" minHeight="50"
 		backgroundColor="#C2D5FE" paddingTop="3" paddingBottom="3" paddingLeft="5" paddingRight="5"
-		verticalGap="0"
+		verticalGap="0" dropShadowEnabled="{this != AuthorController.instance.selectedActivityComponent}"
 		>
 		<ToolActivityComponent activity="{activity.toolActivity1}" isTitleShown="false" />
 		<ToolActivityComponent activity="{activity.toolActivity2}" isTitleShown="false" />
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/OptionalActivityComponent.mxml
===================================================================
diff -u -r2aa362fa3ab4a8226745005fce896c82f7a03309 -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/OptionalActivityComponent.mxml	(.../OptionalActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/OptionalActivityComponent.mxml	(.../OptionalActivityComponent.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -2,7 +2,7 @@
 <ActivityComponent 
 	xmlns="org.lamsfoundation.lams.author.components.activity.*" 
 	xmlns:mx="http://www.adobe.com/2006/mxml"
-	paddingTop="5" paddingRight="5" paddingBottom="5" paddingLeft="5"
+	paddingTop="3" paddingLeft="3" paddingRight="3" paddingBottom="3"
 	>
 	
 	<mx:Script>
@@ -60,10 +60,11 @@
 		horizontalAlign="center"
 		paddingTop="5" paddingRight="5" paddingBottom="5" paddingLeft="5"
 		backgroundColor="#C2D5FE" verticalGap="2"
-    	borderStyle="solid" cornerRadius="4" dropShadowEnabled="true" shadowDirection="right"
+    	borderStyle="solid" cornerRadius="4" shadowDirection="right"
 		minWidth="90" minHeight="100"
 		dragEnter="dragEnterHandler(event);" 
-    	dragDrop="dragDropHandler(event);" 
+    	dragDrop="dragDropHandler(event);"
+    	dropShadowEnabled="{this != AuthorController.instance.selectedActivityComponent}" 
 		>
 		<mx:Label text="Optional" fontWeight="bold" />
 		
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ToolActivityComponent.mxml
===================================================================
diff -u -r2aa362fa3ab4a8226745005fce896c82f7a03309 -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ToolActivityComponent.mxml	(.../ToolActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/ToolActivityComponent.mxml	(.../ToolActivityComponent.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -13,6 +13,7 @@
 			import mx.collections.ArrayCollection;
 			import mx.core.Application;
 			import org.lamsfoundation.lams.author.model.learninglibrary.Tool;
+			import org.lamsfoundation.lams.author.util.Constants;
 			import mx.containers.HBox;
 			import mx.containers.VBox;
 			import mx.containers.Panel;
@@ -39,9 +40,10 @@
 		]]>
 	</mx:Script>
 	<mx:VBox id="vbox" verticalAlign="middle" horizontalAlign="center" borderStyle="solid"
-		dropShadowEnabled="true" shadowDirection="right" cornerRadius="4" minWidth="60" minHeight="50"
+		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}"
+		verticalGap="0" toolTip="{(isTitleShown)? undefined : activity.title}" 
+		dropShadowEnabled="{!(this.state == Constants.ACTIVITY_STATE_MOUSE_OVER || this.state == Constants.ACTIVITY_STATE_SELECTED)}"
 		>
 		<mx:Image id="iconImage" width="30" height="30" source="{activity.tool.libraryActivityUIImage}" />
 		<mx:Label id="lblTitle" text="{activity.title}" visible="{isTitleShown}" includeInLayout="{isTitleShown}"/>
Index: lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/group/GroupActivityComponent.mxml
===================================================================
diff -u -r2aa362fa3ab4a8226745005fce896c82f7a03309 -r6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6
--- lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/group/GroupActivityComponent.mxml	(.../GroupActivityComponent.mxml)	(revision 2aa362fa3ab4a8226745005fce896c82f7a03309)
+++ lams_flex/LamsAuthor/src/org/lamsfoundation/lams/author/components/activity/group/GroupActivityComponent.mxml	(.../GroupActivityComponent.mxml)	(revision 6049b2dc7dad8cf49c0e9f8a92ffe6bb517139c6)
@@ -1,11 +1,12 @@
 <?xml version="1.0" encoding="utf-8"?>
 <ActivityComponent xmlns="org.lamsfoundation.lams.author.components.activity.*" xmlns:mx="http://www.adobe.com/2006/mxml"
 	horizontalScrollPolicy="off" horizontalAlign="center"
-	paddingBottom="5" paddingLeft="5" paddingRight="5" paddingTop="5"
 	toolTip="{activity.toolTip}"
+	paddingTop="3" paddingLeft="3" paddingRight="3" paddingBottom="3"
 	>
 	<mx:Script>
 		<![CDATA[
+			import org.lamsfoundation.lams.author.controller.AuthorController;
 			import org.lamsfoundation.lams.author.model.activity.GroupActivity;
 			
 			[Bindable]
@@ -23,7 +24,7 @@
 		paddingTop="5" paddingBottom="0" paddingLeft="5" paddingRight="5" 
 		verticalGap="5"
 		borderStyle="solid"
-		dropShadowEnabled="true"
+		dropShadowEnabled="{this != AuthorController.instance.selectedActivityComponent}"
 		shadowDirection="right"
 		cornerRadius="4"
 		backgroundColor="#C2D5FE"