When clicking and dragging a folder the cursor icon changes to inform you this is not possible.
Now moving the applications themselves works, but the not the folder containing them, sure you can move the applications one by one, but that will take a lot of time.
I had a quick look and found a XenApp powershell cmdlet for this.
Open powershell on a server where the XenApp SDK is installed (download from here http://community.citrix.com/display/xa/XenApp+6+PowerShell+SDK)
Add-pssnapin Citrix* (this will load the cmdlets)
Move-XAfolder sourcepath destinationpath
so if we wanted to move a folder called testing underneath a folder called testing you may use this line
Move-XAfolder testing applications
This also works for workergroups and servers although clearly you cannot move an application folder into the server section.
If you want more help type help Move-XAfolder -full in a powershell window.
Sam Google +