I have never used the fn key along with the arrow keys in any version of OS X; however, when I try them now using 10.6.4, I get the page-oriented selection results you mention when used with the shift key, not the line-oriented ones you want. This occurs anywhere I can enter paragraphs of text, including in this reply using Safari, so I assume it is a system-wide behavior built into the OS, perhaps one that has changed in 10.6.4.
I also never have seen the results you mention for the home & end keys -- in every version of the OS they always send me to the beginning & end of documents or windows, but like fn + left arrow, do not change the insertion point or select anything.
I'm not sure there is anything you can do about this. In the keyboard system preference, you can create your own shortcuts, but only for existing menu commands, so that won't help.
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