I'm not sure if this a bukkit problem or a corrupted world or something. But the world just ends Could be anything i guess. If you want a list of plugins i can post that too but i'm not sure if that would help. The world is realllly tiny. And if you go far enough, there's like a 8x8 island that spawns, (Where i took the snapshot) A bit confusing. EDIT: Also, there is no error in the console or anything.
http://www.mojang.com/2012/03/minecraft-1-2-5-prerelease/ Jens has stated there is a bug Jens - "Unfortunately the 1.2.4 patch included a severe crash bug in the world generator" He stated the next update should fix it but try rolling back to a backup if you have one in the meantime.