With the help of these two great tutorials from Andy Zupko you will get familiar with two ways of dragging in 3D.
1. The Easy Way of Gragging in 3D
It is no appropriate solution to drag an object in 3D in multiple directions using the tools that are already built into Papervision 3D. If you create an invisible Plane object, you can detect where it is hit by the mouse in 3D space and then move the object to that position.
This way is rather good, but it is definitelya difficult approach to dragging objects in 3D.
To get the detailed tutorial and get the source you may here.
2. The Right Way of Dragging in 3D
This way is much more easy and stylish than the previous one. In the 1st way the author introduced some new functions of dragging in 3D. Those functions can be used for much more than just for dragging. And this 2nd way teaches us make a good use of them.
Click here to view the detailed tutorial and get the source.