Change object layer from layer drop down list

This is not working in 2006. I can't find what controls this setting. Normally I highlight object, and pick the layer in the list and it changes,
well it used to. Thanks for assistance.
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Is PICKFIRST set to 1?
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MichaelB
www.michaelbulatovich.ca
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Add pictures here
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<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

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