Thanks flits, but I'm still having trouble. I don't see the arrows that you're talking about when working in vertex mode in the 3d window.
I've prepared another image to try to explain the issue again:
To reiterate, I'd love the ability to drag this vertex along the z-axis in the 3d window. Holding down the z key while dragging this vertex seems like a very intuitive way to solve the problem.
Thanks!
- Bret