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The color is almost black now. I don't see any permanent color changes when I move the mouse over the buttons.

How do you test with this code to see the problem?

Please Edit your post and wrap your code with
<YOUR CODE HERE> to get highlighting

How do you test with this code to see the problem?

You need to escape (tell the compiler to ignore) the \ which is the escape character: "\\"

I'd suggest you take one of the example programs from the tutorial and play with it to see how DnD works.

Have you looked at the tutorials? There are some simple examples there you could experiment with.
Lesson: Drag and Drop and Data Transfer (The Java™ Tutorials > Creating a GUI With JFC/Swing)

I wonder what the java program would receive when a file is dragged from the desktop into the program.
If the java program got the path to the file, it could read the contents of the file and...