Can't drag out the bottom right corner of image to resize

Hi, I'm running PS CS3 on Mac iBook with 10.5.8
I've been using this setup for years & have always been able to drag out the right bottom corner to increase the grey space round an image so i can transform better or what ever. But now when I try to drag out that corner the image window flinches slightly & a line appears around the image which disapears when I let go.
Also when I try to expand the layers palette down by dragging it's lower right cornes so I can see more layers nothing happens, there is no stripey corner marks on that corner & when i try click & try to drag nothing happens.
Thanks for any suggestions on how to be able to resize my windows again.

Boilerplate-text:
Are Photoshop and OS fully updated?
As with all unexplainable Photoshop-problems you might try trashing the prefs (after making sure all customized presets like Actions, Patterns, Brushes etc. have been saved and making a note of the Preferences you’ve changed) by keeping command-alt-shift pressed on starting the program or starting from a new user-account.
System Maintenance (repairing permissions, purging PRAM, running cron-scripts, cleaning caches, etc.) might also be beneficial, Onyx has been recommended for such tasks.
http://www.apple.com/downloads/macosx/system_disk_utilities/onyx.html
Weeding out bad fonts never seems to be a bad idea, either. (Validate your fonts in Font Book and remove the bad ones.)
If 3rd party plug-ins are installed try disabling them to verify if one of those may be responsible for the problem.

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