>>1-Some of the colors in the color palette are not applied in IE.But it is working fine in firefox.

Can you show me how to reproduce this issue?

 

>>Is it possible to move the themed(2003 theme) dialog all around the screen with out using standard dialog.Actually the dialog is moved with in the frame only

 

We will release a new build which allows you use the Iframe dialog instead of the standard dialog in this situation.