Recently I was asked about a video that I added to YouTube some time ago: making drag&drop uploads work in CKEditor.
That video was a little test and I used a non-public modification of the image paste plugin that allows to automatically upload images that are pasted in Firefox. The video shows how to use drag and drop from the file system into a CKEditor instance and get that image or file uploaded to the server and inserted into the editor without any extra steps, if you know how to drag a file, adding it to CKEditor can't be any simpler.
The base of that code is XHR2 and FormData to send a File object to the server as well as the dataTransfer interface in the drop event and finally some API to find the correct drop location.
What does all those buzzwords mean?
Just that there are no browser plugins involved, if you use a browser that supports those new APIs then this feature will work: for Firefox, Chrome and Safari you can use the current stable versions, if you use IE then you need the IE 10 preview, and unfortunately Opera supports most of those features in Opera 12, but not the API to get the insertion point, so at the moment it's the only engine that it's left out.
Getting the plugin
The plugin is available in the version 4 page.
If you want to check how it works, you can use this demo page.
2.0 First release including drag&drop
2.1 June 17th, 2012. Added support for pasting in Chrome, correctly process files copied and pasted in Firefox from the desktop if they aren't png. Support dropping multiple files.