This sample show a very simple implementation of the 7.0 Moveable Modal Dialog.
Since you can't call ModalDialog on a MModal, you have to do the actual hit restricting and menu dimming yourself, but it's not really much more of a chore. All you need to add is one lil' global that tells you when you've got a MModal up, and things will be wonderful.
Select 'Open Moveable Modal' from the Test Stuff menu to watch it work.