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From the page: "Mac OS X 10.7.2 Gives You Better Spaces Arrangement Options [OS X Tips]
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By David W. Martin (6:00 am, Oct. 24, 2011)

Mac OS X 10.7.2 Gives You Better Spaces Arrangement Options [OS X Tips]

Apple has fixed an issue with Mission Controlâ€s All Windows mode in Mac OS X 10.7.2 that will make a lot of people happy. You can now rearrange the desktop spaces and full-screen applications by dragging. The Dashboard and the first desktop space remain fixed in place at the first and second places in the desktop spaces and full-screen applications list.

Although dragging these objects around is new, the trick to getting it to work is similar to a previous tip.

By default Mac OS X will automatically rearrange spaces based on the most recent use. If you want to manually "