Touchpad randomly drops click-drag items dell xps 1640

When I click the left touchpad button then move the pointer, the computer will randomly behave like I released the button, causing it to select whatever the pointer happens to be over. Naturally this leads to unpredictable results.

I've played with the dell touchpad settings and have them configured the way I like (speed, no drag lock, tap-to-click, etc). It's how I've had them on every one of my other computers (including a dell 1520) and have never had this issue.

I'm on win7 and just got the computer last week.

This problem is infuriating since I'm working on graphics projects.

Any ideas?

Jeff