I'd like to start using the Home View to keep things I work on at the front whenever I log in, however I don't know how. If I drag any existing files onto it, nothing shows up. If I manually select it, the actions I can take with it include "Don't show this in Home", and if I do that, then follow it up with "Show this in Home" (trying to refresh it or something), nothing happens.
I think you are misunderstanding how the Home view works.
The Home view displays all of your files and documents. Because of this, the only thing you can do is hide items from the home view.
For clarification, the All Items view displays *all of your files including those that you have hidden from the Home view.
Both views exclude files or folders that are in the bin.
See this Google Documents Help article for further information.