Under Panther, and it seems in Tiger as well, when I have a webdav server mounted sometimes the system locks up. Applications will lock while trying to open the Open File dialog, the Finder locks, etc.
The solution is to keep Activity Monitor on your dock. If this happens to you, launch Activity monitor and open the activity window (cmd-1). Then search for webdav and find the mount_webdav process. Then select the process and use the quit button to quit it. This will unmount your server and free up the blocked applications.