Check the relative size of the polys in both the arm and dress section in question. Nerd created some bootie and mitten props to use with charcters interacting with dynamic clothing; it seems that the small, numerous polygons in the hands and feet were small enough that they could violate the collsion detection...at least until they did collide, and the cloth seemed to become trapped -in- the mesh. I think the winding order could have an effect on that as well, but as I am not a modeller, that is just something I remember reading from long ago....