None of the above has worked sorry. I renamed my configuration folder to "configuration_new" and it created another folder "configuration" is this right? otherwise I am at a loss here.
Yes, that is how it should work. DW creates both a new cache file and config folder when you open the program, so if you renamed the folder, a new one will take its place (renaming it allows you to move files from the old configuration to the new if needed).
Restoring preferences didn't help either?
Something else to check would be structural errors in your HTML may be throwing the program off. Run the validator under File > Validate > Current Document W3C and see if there are any problems (like missing end tags) anywhere in your html. A lot of the program's functionality relies on clean code, when it runs into errors, it can break all sorts of things.
As an alternative way to get the id in place, what happens if you place the <div> without adding the ID to the dialogue, then add it to the Div ID field in the main Properties window instead (Window > Properties or Ctrl + F3 if it's not open)?