Except I have noticed all my backgrounds are still in the old version folder where do I need to move them to so they are in the new version folder?
Move/copy them to the backgrounds folder in the ObjectDockPlus2 folder, XP path C:\Program Files\Stardock\ObjectDockPlus2\Backgrounds
Also, any ideas yet on why the tabbed dock I have that is dragging so slowly when I mouse over it?
OD2 config, Settings, Performance Options, make sure is set for Performance.
but if I'm understanding right I can uninstall the old version and it not be a problem?
Yes you can, but IMO until all setting options are in version2 it may be best to keep 1.9 installed to have access to the option in it.