I had the exact same problem as both of you, apparently it's been an issue for lots of Mandrake users, (or at least the ones who figured out that DrakSec sucked). DrakSec only works if you want to change the security level to "high", "higher" or one of those settings. The detailed options that are in DrakSec don't work at all. Supposedly this bug is the cause -
http://qa.mandrakesoft.com/show_bug.cgi?id=4629
Also you certainly can edit the files in /usr/share/msec to fix this problem, except that the files in this folder are mostly scripts and things for msec that really shouldn't be futzed with just to change your msec config, (just MO). I'd also hate to be a newbie to linux and have to figure out what I'm supposed to edit amongst the pile of stuff in that folder. For an easier alternative check this out - msec reads the files in /etc/security/msec to override any settings that are currently in use, (the settings that can't be changed via DrakSec other than to change the security level from standard, to high, or whatnot). So if you make level.local and perm.local files in the /etc/security/msec folder you can edit those files with the syntax from "man mseclib" and msec will work like a champion. I personally find the type of editing that you need to do on the security.conf, level.local files is a lot easier to do than getting into all the scripts in /usr/share/msec. After you write your config files you should run the "msec" command to make the changes.
Or if you don't want to edit config files and all that I suggest bumping your DrakSec level up to "high" at least, as I find the msec options for that level to be pretty good for my needs without being overly paranoid for the average user. In any case I hope that Mandrake gets their act together and fixes this damn bug. Users who employ DrakSec and set important options like "allow_remote_root_login" might currently have a faulty impression of what their system's security is. I know that I assumed DrakSec was working until I found out otherwise. "allow_x_server_to_listen = never" my ass.