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I have two layers, one point file and one polygon. The point file is in WGS 84 and polygon in NAD83-UTM10. The project CRS is NAD83-UTM10. They project fine with on-the-fly projection turned on.

I want to clip the point file with the polygon and understand that all layers need to be in the same CRS to enable clipping or other ftools functions. When I change the CRS of either layer to the other (changing the point file to NAD83 for example), it projects far away from where it was (ie. doesn't line up). This is the same if I right-click to change the CRS or if I "save as." Same no matter which CRS I select.

I'm running QGIS 2.0.1 Dufour on Mac.

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Reset to default
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For advanced geoprocessing tasks across several layers, it is always best to turn On-the-fly reprojection off. Then you see if the layers align or not.

Perform reprojection using Save As... on all layers that have a different projection, add the result to the canvas, and remove the old layers from canvas. Otherwise you might still catch the wrong layer, and clipping will result in nothing.

Your point data is rather big, but succeeded at last:

enter image description here

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