I couldn't duplicate your problem on LabVIEW 7.1, WinXP Pro.
If you right click on a subVI on a diagram, I get the context menu and I'm not able to drag it to another diagram at all.
If I left click and drag to a new diagram, the original stays on the first diagram and just copies it to new one, and does nothing to the copy on disk.
I've never seen LabVIEW delete anything from the disk unless it's told to using the advanced file functions. If it was a new VI that had not been saved to disk yet, I could see this happening, but if you've been working on it for a few weeks, it shoudl still be there.
Are there any more details you can provide?
Ed

Ed Dickens - Certified LabVIEW Architect
Lockheed Martin Space
Using the Abort button to stop your VI is like using a tree to stop your car. It works, but there may be consequences.