Having recently moved to 2006 (currently LDD2006 then on to Civil 3d 2006), we have also started to use the Tool Palettes. A co-worker of mine ran into an issue as follows:
-Insert Block from Tool Palettes
-Issue commands as continue to work in drawing
-"Randomly" the last block he inserted from Tool Palettes displays at the cursor waiting to be inserted..
Looking back at the command log (F2), the ExecuteTool command is run. This command apparently runs the last Tool Palette function although we can not find out why it ran when not prompted for.
Hopefully you do not run across any oddities with your Tool Palettes.
Dan