Be ready to write a lot of CSS. You need to indicate what is being dragged, where it will be dropped, if it is dropped above, below or nested into another item. These are a lot of styles that need to be pretty.
The standard drag'n'drop solution from jQuery UI (draggable/droppable) do not work well for nested lists. Nor do they give you precise enough control e.g. to distinguish if an element will be dropped above, below or onto another item. I ended up using only draggable and reimplement something like droppable in ~120 lines of Javascript.
There is some drag'n'drop support in Capybara/Selenium nodes, but again it's not precise enough to distinguish if an element will be dropped above, below or onto another item. You'll need to emulate drag/drop events (mouseup/mousedown) with evaluate_script and jQuery.
You must make some hard UI decisions when your items can be both leaf nodes and containers of other items. E.g. how can a user tell your app to drop below a future sibling vs. nest into a future parent? I'm quite happy how it works in Holly, but then again my target audience are nerds.