Only transform tool works

I just upgraded to FCS2 w/ Motion 3. All of my old projects open fine and work as expected. However every-time I create a new project and import a piece of media none of the tools work on it except for the Transform tool even though it will let me select the other tools.

For example I open Motion, select NTSC Broadcast SD preset, import a video clip, click on the Adjust Shear tool, then click and drag but all that happens is that the position changes. This happens with every tool I choose. It also happens if I create a shape or a mask and then try clcik and drag the points?

It's driving me crazy. Anyone have any ideas?

MBP 2.0 , 2G RAM, >20% of hard drive free, OS 10.4.10, FCS 2, Permissions repaired multiple times today as well

Have you tried trashing your Motion preferences file?

Thanks, that did it. Here is where they are in case this happens to anyone else:
user/library/preferences/com.apple.motion.plist