How do I make mousedrag inside Panel move form window?

The Solution that works best for me is using unmanaged code, which gives you smooth window movements unlike the answer posted by HatSoft.

3 small steps to drag your window on Panel movement

using System.Runtime.InteropServices;

add these six lines inside your class

public const int WM_NCLBUTTONDOWN = 0xA1;
public const int HT_CAPTION = 0x2;

[DllImportAttribute("user32.dll")]
public static extern int SendMessage(IntPtr hWnd, int Msg, int wParam, int lParam);
[DllImportAttribute("user32.dll")]
public static extern bool ReleaseCapture();

and your MouseMove event on Panel should look like this

private void panel1_MouseMove(object sender, MouseEventArgs e)
{
   if (e.Button == MouseButtons.Left)
   {
      ReleaseCapture();
      SendMessage(Handle, WM_NCLBUTTONDOWN, HT_CAPTION, 0);
   }
}

posted it a little late :) , who knows we might need it again in future.

You can achieve it by using the MouseMove Event of the panel

Example should be something like this (Sorry have not tested it)

private void panel1_MouseMove(object sender, MouseEventArgs e)
{
    if (e.Button == MouseButtons.Left)
    {
        this.Location = new Point(Cursor.Position.X + e.X , Cursor.Position.Y + e.Y);
    }
}