This appears to be a jQuery bug regarding animating using percentages.
It is referenced here but marked as fixed for 1.7 - it reappears in 1.8.3 as changing the jQuery version to 1.6.4 or 1.7.2 in your fiddle will make it work as expected.
Additionally, converting to pixels works as expected: http://jsfiddle.net/dv4Hd/24/
// Must include code when linking to fiddle
var $progressBar = $('#render-progress .bar');
var percentIncrease = 0.50;
var parentWidth = $('.progress').width();
var increasePx = parentWidth * percentIncrease;
$progressBar.animate({width:increasePx}, 2000)
I'll search the queue to make sure a report isn't already active, and submit one this week if not.