Fedora Core 5 x86_64, with a custom low-latency kernel (with a bunch of patches!). Using the bundled Wacom drivers (as they are pretty much the same as the ones in the Linux Wacom [linuxwacom.sf.net]), I only lack the tools for "manipulating" the device (namely a TCL/Tk front end). The tablet works as expected in The GIMP (pretty much Inkscape and The GIMP are the only apps tablet-aware I have).
I get the same thing wrt only being able to drag things around with the 'eraser'. I've never complained before because I thought it was supposed to be a feature. I run Debian unstable on an AMD64 with Linux 2.6.14 (though it's done the same with several kernels), with a Wacom Intuos 3 tablet. I'm only using the version of Inkscape in unstable, though: z1@...1915...:~$ inkscape --version Inkscape 0.43 (Jan 14 2006)
I'd like it if the tool selection worked like in the GIMP, where each stylus remembers its own 'last used tool', so you can change tool just by switching from tip to eraser, or to your normal mouse.