Wow, really don't know what else to say - but that's never stopped me from saying something anyway.

Best bet is probably to wait until Gabe (the forum administrator) gets back from break and see if he can come up with anything. In the meantime - a couple of comments and suggestions.
1. Your configuration sounds as "standard" as anything I can think of - doubt there is any problem there. You might try another mouse in case there is some funny problem with the mouse driver interface. (Talk about longshots

- but easy to check if you have another one around. I actually did have a mouse problem with a rather cheap mouse on a fabric surface - I couldn't get a solid reading from it though the touchpad was working fine. ) Another option is reloading the Java engine - though if the latter was the problem, Alice should have given you some error messages.
2. I'm assuming from your comments that the mouse click functions work OK and that you can actually run the examples, just not edit them or add characters. To try the following, you'll need to have "snowLove" loaded and have run it successfully.
a. Make sure you can bring up the world.fadein method by clicking on the edit button. (Don't worry about the color of the method tabs - that's a function of the display setting. They are bluish on one of my monitors and black on another.)
b. See if you can add another object to the scene and move it around
just using mouse clicks and methods. To bring up a method, first try right clicking on the object in the object tree and then try right clicking on the object itself.
(If all this works, the basic mouse click is OK, the move methods are working and the program is detecting the current cursor position. I can't think of any other reason you shouldn't be able to drag an object around in the world so left click on an object and try it.) (Actually, not quite true - go to "Seldom Used Properties" in the properties lists for the object and make sure "isFirstClass" is true - a real longshot that it's not.

)
c. A second test would be to see if you can edit the "fadein" method. First try to change something (say the wait time) just by clicking on the little arrow to the right of the current value and then using the pulldown menu. If that works, try moving the position of one of the existing commands by using drag and drop - finally see if you can drag and drop a new method to the same place.
Of course if all that works, you don't have a problem

- but you actually do.

Maybe a better suggestion is to just find a good New Year's Eve party and wait till next year.
Good luck.