(Using firefox on Mac, on Serverfault)
I dragged a tag from the right hand side into the favourite tags box, and then clicked add.
What I got was an added tag such as: 'http://serverfault.com/questions/tagged/http%3A//serverfault.com/questions/tagged/dns'
Perhaps the DnD functionality should ensure only the last part gets added as a tag?
Update: Based on random's clarification, rather than fixing the DnD, should just fix the onclick for the Add button?