Double click on the word Transform in the transform pallette. Do it again for a different size - it has four sizes if you include just the word. Five if you include the double arrow click to minimize.
There's also miniscule arrows on the left that do the same thing...
On what OS are you running Illustrator CS5?
Remove it from the Align pallette so it's stand alone, can you now drag from the right side or bottom or bottom right corner?
If not you might want to try a prefs reset.
Have you tried using one of the default Workspaces? Might re-jig the interface.
I'm sure the main reason for this oddity is just that Illustrator CS5 is not supposed to properly run on that OS version.
Strictly speaking, it is just incompatible and therefore you will detect some other things that do not work as expected sooner or later.