Hi Mike,
The quick answer
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You need to decide where you want the topic to be - usually its parent topic. Then drag the small red cone to the parent cone you've chosen. The target cone will light up to confirm. Drop the small red cone - it will become a child of the target cone.
Argey
More detail in case you're interested
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Choosing the parent to drop it on is the most common case, but the target cone can become a child of the new topic, or a topic to be loosely associated with the new one. The radio buttons at the bottom of the Create New Topic dialog give you this choice.
The red cones are called floating topics because they float on the window, outside the 3D landscape. That means that even though a floating topic is waiting to be placed, you can still fly and search while you are looking for the right topic to drop the new one on, and the red cone will stay where it is on the screen, unaffected by whatever is happening in the 3D environment.
In all of the above, I'm assuming you're using the 3D interface, but in 2D, for 'cone' read 'rectangle' and it works the same way.