The dynamics of a propagating magnetic island interacting with a resistive wall or an externally generated, resonant magnetic perturbation is investigated using two-fluid, drift-(magnetohydrodynamical) (MHD) theory in slab geometry. In both cases, the island equation of motion is found to take exactly the same form as that predicted by single-fluid MHD theory. Three ion polarization terms are found in the Rutherford island width evolution equation. The first is the drift-MHD polarization term for an isolated island, and is unaffected by the interaction with a wall or magnetic perturbation. Next, there is the polarization term due to interaction with a wall or magnetic perturbation which is predicted by single-fluid MHD theory. This term is always destabilizing. Finally, there is a hybrid of the other two polarization terms. The sign of this term depends on many factors. However, under normal circumstances, it is stabilizing if the noninteracting island propagates in the ion diamagnetic direction (with respect to the wall or magnetic perturbation) and destabilizing if it propagates in the electron diamagnetic direction. (C) 2005 American Institute of Physics.