C#

using System;
using System.Drawing;
using System.Windows.Forms;

public class test : System.Windows.Forms.Form
{
	RichTextBox rtb;


	public test()
	{
		InitializeComponents();	
			
	}
	
	public void InitializeComponents()
	{
		rtb = new RichTextBox();
		rtb.Location = new Point(0, 0);
		rtb.Size = new Size(200, 250);
		rtb.AllowDrop = true;
		rtb.DragEnter += new DragEventHandler(rtbDragEnter);
		rtb.DragDrop += new DragEventHandler(rtbDragDrop);
		
		this.Controls.AddRange(new Control[] {rtb});
	}	

	
	private void rtbDragEnter(object sender, DragEventArgs e)
	{
		   if (e.Data.GetDataPresent(DataFormats.Text)) 
		      e.Effect = DragDropEffects.Copy;
		   else
		      e.Effect = DragDropEffects.None;
	}
	
	private void rtbDragDrop(object sender, DragEventArgs e)
	{
		  int i;
		  String s;

		   i = rtb.SelectionStart;
		   s = rtb.Text.Substring(i);
		   rtb.Text = rtb.Text.Substring(0,i);

		   rtb.Text = rtb.Text + 
		      e.Data.GetData(DataFormats.Text).ToString();
		   rtb.Text = rtb.Text + s;
	}
	
	[STAThread]
	public static void Main()
	{
		Application.Run(new test());
	}
}

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using (StreamReader reader = new StreamReader("file.txt"))
{
  string line = null;
  while ((line = reader.ReadLine()) != null)
    // Parse and save 'line' to an XML file.
}