Do you have javascript enabled?
Have you modified any of the templates?
Either of these options could effect the moderation drop-down menu.
As a test - does the drop down menu still perform actions on the threads you have selected or does it think there are no threads selected? There could be many reasons why the moderation menu is not working properly. Javascripts update the number in the box but the entire process is a simple HTML form. Check that either the opening or closing tags of the form a still in place that wrap around the thread list.
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