PocketEarth v1.3 includes an updated Help Manual accessible in the Settings screen. The version on our website is out of date, but will be updated within the next couple hours. If it doesn’t clarify things, let me know here and I will do my best to explain.
An important point to understand though, is that their are now 2 different kinds of “Route Points”: Destination Points and Control Points. Control Points are created by pressing and dragging from the route line and are used for directing the routing algorithm to take certain streets. Route Destinations, on the other hand, will break the route into separate segments, each with their own driving instructions, and overview info. Route Destinations can be created in the same ways as in v1.2, and now also via the new Quick Route Menu from the main route button on the map. Finally, a Route Destination can also be created from a Control Point by tapping the route symbol on the control point’s info panel.
I think what you mentioned about dragging route points has to do with a “Snap to Road” behavior we added. This behavior applies to all Control Points, and the Destination Points only when dragging from a more zoomed out view. This behavior is done in order to provide better results and less errors from the CloudMade routing service, since it fails if a point is too far from a “Routable Location”, namely a street. Consider that depending on your zoomlevel, dragging a route point just 1 pixel on the screen could represent 100s of meters to several kilometers.
Let me know if you have any other questions after reading the updated help manual!