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I know at a Jewish wedding, just before the Ketubah is signed, the groom picks up a handkerchief in front of everyone. I remember this has something to do with "kinyan chalifin"; could someone please refresh my memory: whose handkerchief is this, and what exactly is being acquired by whom?

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In the name of Rabbi Lamm, taken from: http://www.myjewishlearning.com/life/Life_Events/Weddings/Liturgy_Ritual_and_Custom/Ketubah/Details_II.shtml

The Act of Acquisition (Kinyan). In order to seal all of the stipulated obligations, and to assure that the document is not asmakhta (based on speculation), the rabbis required the legal formality of kinyan, the act of acquisition. Because the bride cannot take possession of all the property, the groom affirms it by a symbolic act called kinyan suddar.

Thus, at the wedding, the rabbi or one of the witnesses gives a handkerchief or other article (but not a coin) on behalf of the recipient (the bride) to the groom. The groom then returns it. Then they record in the ketubah, ve'kanina ("and we have completed the act of acquisition"). This symbolic act must be seen clearly by the witnesses, who are the makers of the contract, before they sign to its validity. If the ketubah is calligraphed by a scribe, or printed in advance of the wedding, one letter of the word ve'kanina (or the whole word) is usually omitted so that the ketubah is technically not completed before the kinyan itself is made. If this custom is overlooked, it does not alter the ketubah's validity, so long as the witnesses in fact witness the kinyan-transfer of the handkerchief.

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Thanks. The nuts-and-bolts of the symbolic transaction are that the bride is acquiring the various rights described in the ketubah FROM the groom, so someone on her behalf (usually the rabbi) hands him a handkerchief. (From mail-archive.com/daf-discuss@shemayisrael.com/msg00005.html) –  Shalom Jan 7 '10 at 17:24

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