WebDAV can't copy or change files
The WebDAV sharepoint is the root web documents folder for the out-of-box Apache server, but the httpd.conf file has been customized a bit. This documents folder and all enclosed items have user and group owner as www, with rwx permissions, as per suggestions in the server manual and on these forums.
The site itself as defined in Server Admin is just a special site on a specific port which only has WebDAV enabled. The site has one realm defined (the web documents folder), authorization is basic, and authorized users and groups can browse and author.
Note: I'm stuck with using OS X Server 10.3.9 for now, but if a solution involves an upgrade, I'm willing to upgrade. I'm also willing to hear other suggestions for sharing common web server documents on this setup.