I wouldn't recommend trying to move the contained control into another container. This could have a whole bunch of problems, especially when the initial drag occurs. However, I think we might be able to work around your issues without having to resort to that. If you want to be able to have a popup with a control in it as well as the ability to resize the floating toolbar when you tear it away, it might be better to use a ControlContainerTool. Add a PopupMenuTool to your toolbar instead of a PopupControlContainerTool. Set its Settings.PopupStyle to Toolbar. Then add a ControlContainerTool to its Tools collection (or just drop down the menu at design-time and add it). Put your control in the ControlContainerTool. Now, things should be pretty much the way they were when you were using a PopupControlContainerTool. This setup also does not support resizing the tearaway and you can submit a feature request for that ability for either tool here: http://devcenter.infragistics.com/Protected/RequestFeature.aspx. However, we can work around this and manually implement resizing for the tearaway (this code will only work for the ControlContainerTool in a menu and not the PopupControlContainerTool. That is why you need to make the change mentioned above). Add the following code to your Form and make sure to hook up the MouseEnterElement and MouseLeaveElement event handlers to your UltraToolbarsManager:

private bool inResizeOperation;
private ResizeSide resizeSide;
private Point originalResizeScreenLocation;
private Rectangle originalFloatingBounds;
private Size originalControlSize;
private FloatingToolbarWindowBase floatingWindow;
private UIElement floatingWindowElement;
private ControlContainerTool controlContainerTool;

private void HookFloatingWindow( UIElement floatingWindowElement )
{
 this.UnhookFloatingWindow();

 FloatingToolbarWindowBase floatingWindow = floatingWindowElement.Control as FloatingToolbarWindowBase;

 if ( floatingWindow == null )
  return;

 // Only a floating toolbar created from a tearaway should be resizable.
 if ( floatingWindow.Toolbar.TearawayToolOwner == null )
  return;

 if ( floatingWindow.Toolbar.Tools.Count != 1 )
  return;

 this.controlContainerTool = floatingWindow.Toolbar.Tools[ 0 ] as ControlContainerTool;

 // Only a floating toolbar with a single control container tool should be resizable.
 if ( this.controlContainerTool == null )
  return;

 this.floatingWindowElement = floatingWindowElement;
 this.floatingWindow = floatingWindow;
 this.floatingWindow.MouseDown += new MouseEventHandler( this.floatingWindow_MouseDown );
 this.floatingWindow.MouseMove += new MouseEventHandler( this.floatingWindow_MouseMove );
 this.floatingWindow.MouseUp += new MouseEventHandler( this.floatingWindow_MouseUp );
}

private void UnhookFloatingWindow()
{
 if ( this.floatingWindow == null )
  return;

 this.floatingWindow.MouseDown -= new MouseEventHandler( this.floatingWindow_MouseDown );
 this.floatingWindow.MouseMove -= new MouseEventHandler( this.floatingWindow_MouseMove );
 this.floatingWindow.MouseUp -= new MouseEventHandler( this.floatingWindow_MouseUp );
 this.floatingWindow = null;
 this.floatingWindowElement = null;
 this.controlContainerTool = null;
}

private void floatingWindow_MouseDown( object sender, MouseEventArgs e )
{
 this.inResizeOperation = this.floatingWindowElement.PointInAdjustableArea( e.Location );

 if ( this.inResizeOperation == false )
  return;

 this.originalResizeScreenLocation = this.floatingWindow.PointToScreen( e.Location );

 this.originalFloatingBounds = this.floatingWindow.Bounds;
 this.originalControlSize = this.controlContainerTool.Control.Size;

 Rectangle rect = this.floatingWindowElement.Rect;

 if ( e.Y <= rect.Top + 3 )
  this.resizeSide = ResizeSide.Top;
 else if ( e.Y >= rect.Bottom - 3 )
  this.resizeSide = ResizeSide.Bottom;
 else if ( e.X <= rect.Left + 3 )
  this.resizeSide = ResizeSide.Left;
 else if ( e.X >= rect.Right - 3 )
  this.resizeSide = ResizeSide.Right;
 else
  this.inResizeOperation = false;
}

private void floatingWindow_MouseMove( object sender, MouseEventArgs e )
{
 if ( this.inResizeOperation == false )
  return;

 Point currentResizeScreenLocation = this.floatingWindow.PointToScreen( e.Location );
 Point diff = new Point(
  currentResizeScreenLocation.X - this.originalResizeScreenLocation.X,
  currentResizeScreenLocation.Y - this.originalResizeScreenLocation.Y );

 Point location = this.originalFloatingBounds.Location;
 Size size = this.originalFloatingBounds.Size;
 Size controlSize = this.originalControlSize;

 switch ( this.resizeSide )
 {
  case ResizeSide.Left:
   location.X += diff.X;
   size.Width -= diff.X;
   controlSize.Width -= diff.X;
   break;

  case ResizeSide.Top:
   location.Y += diff.Y;
   size.Height -= diff.Y;
   controlSize.Height -= diff.Y;
   break;

  case ResizeSide.Right:
   size.Width += diff.X;
   controlSize.Width += diff.X;
   break;

  case ResizeSide.Bottom:
   size.Height += diff.Y;
   controlSize.Height += diff.Y;
   break;
 }

 this.controlContainerTool.Control.Size = controlSize;

 this.floatingWindow.Toolbar.FloatingLocation = location;
 this.floatingWindow.Toolbar.FloatingSize = size;
}

private void floatingWindow_MouseUp( object sender, MouseEventArgs e )
{
 this.inResizeOperation = false;
}

private void ultraToolbarsManager1_MouseEnterElement( object sender, UIElementEventArgs e )
{
 if ( e.Element is FloatingToolbarUIElement )
  this.HookFloatingWindow( e.Element );
}

private void ultraToolbarsManager1_MouseLeaveElement( object sender, UIElementEventArgs e )
{
 if ( e.Element is FloatingToolbarUIElement )
  this.UnhookFloatingWindow();
}

private enum ResizeSide
{
 Top,
 Bottom,
 Left,
 Right
}

As far as the borders go, I looked into this and the colors are actually hard coded, but you can get around this as well with a DrawFilter. Add this draw filter implementation to your project:

internal class BordersDrawFilter : IUIElementDrawFilter
{
 bool IUIElementDrawFilter.DrawElement( DrawPhase drawPhase, ref UIElementDrawParams drawParams )
 {
  drawParams.DrawBorders(
   // Use any border style here
   UIElementBorderStyle.Solid,
   Border3DSide.All,
   // Use any color here, or use a different DrawBorders overload for multi-color border styles.
   Color.Red,
   drawParams.Element.Rect,
   drawParams.InvalidRect);

  // Return True so the default border drawing logic is not used.
  return true;
 }

 DrawPhase IUIElementDrawFilter.GetPhasesToFilter( ref UIElementDrawParams drawParams )
 {
  if ( drawParams.Element is FloatingToolbarUIElement )
   return DrawPhase.BeforeDrawBorders;

  return DrawPhase.None;
 }
}

Then just create an instance of this class and assign it to the DrawFilter on the UltraToolbarsManager.