When in the staff view I am not able to make the time line appear inside a measure when clicking with the mouse, but only at the beginning of a measure. Also, if I click and drag a midi note it only wants to go to the beginning of the measure.
 
Can someone tell me how to setup the staff view so that I can select a note and drag it to any position within a measure?
 
Thanks.

It might be that the snap setting is not set to a small enough resolution.

As TimV said: Looks like your Snap setting is set to "Measure" so moving notes and clicking the Now Time, makes them snap to the barline.

I had the Snap Function turned off but did not realize that the last chosen snap resolution still applies even when this function is unselected.

Thanks, changing the resolution did the trick.