1. Start dragging application window smaller/bigger from lower-right corner 2. Window resizes smoothly until reaching a certain point on screen in which the window freezes and does not follow the mouse
Resizing of browser windows is probably related to Safari, not WebKit. Please report this issue at http://bugreporter.apple.com/. See <http://webkit.org/blog/101/back-to-basics/> for more info.
Ain, do you have any Input Managers, APEs or haxies installed like PithHelmet, Saft, SafariStand, etc.? If so, these could cause any number of issues. Please try removing them to see if this fixes the issue.