I have a custom activity which is a composite of several activities. There are some activities on the composite where I would like users of the custom activity to be able to drop more activities at design time on the Worfkflow surface.
Custom Composite activities don't allow drag-drop actions out-of-the box, but I have tried using a custom designer and overridden OnDragDrop etc. and that did not work either.
Code samples/snippets in any answers would be most helpful...
Even though some time has passed, and the following isn't exactly what the OP asked for, I'll post a link to a valuable resource here. It might be a useful starting point for others looking for this kind of information.
WF Activities--Customizing the Designer over at the C# Online.NET site.
Take the code snippets from the first three pages (Implementing a style, Implementing a Designer, Adding attributes to the Activity) and voilà, you have the building blocks for a composite activity that accepts other child activities.
(What's missing now to answer the OP's question is how to restrict the activity insertion process to certain positions in the child activity graph.)