Version:            (using KDE KDE 3.5.3)
Installed from:    Gentoo Packages
Compiler:          gcc 3.3.6 
OS:                Linux

I hit this bug consistently, using a combination of konqueror, kontact and kwallet, when doing the following:
1) when my desktop opens, I click immediately on konqueror and kontact icons in kicker
2) konqueror opens faster than kontact
3) I start to type the url I want to go to in konqueror's address bar
4) the address bar hints pops-up and show the matching urls
5) kontact opens and immediately attempts to get my accounts password from kwallet
6) kwallet prompts me for for my wallet's password
7) the desktop is now frozen.

Here is what I see (sorry, I cannot take a screenshot):
a) kwallet's prompt dialog box shows under konqueror's url hint box
b) the cursor is blinking in in textfield of kwallet's prompt
c) nothing I type at the keyboard, is registered either in konqueror or in kwallet's prompt
d) I can move the mouse cursor smoothly but I cannot click anything, not even in kicker.

When I realize I did the mistake again, I usually kill X with Ctrl+Alt+Backspace :(.

Of course knowing this problem, I tried to consciously start kontact first,  before starting konqueror but I often forget and I hit the problem every single time I do.

I do not know for sure that it is a kwin issue but since I'm guessing it is a window management issue, I posted here.