It started out as an experiment in Mail.app (formatting an email for reply), and so I tried it in Script Editor, TextEdit, Tex-Edit Plus, and Microsoft Word -- it worked in all of them. So if you need a quick duplicate of a section of text, just Option drag and drop it.
[robg adds: This makes sense, as the Option key in the Finder is the "duplicate" modifier. I had just never though to try it with a drag and dropped text selection...]

