What are known examples of drugs that racemize/stereoconvert in vivo, and how are they converted?
Although I can't think of any drug examples other than thalidomide, here's information on thalidomide's mechanism:

The chiral carbon of thalidomide can tautomerize in basic conditions into an enol, which is achiral.  A reversal back to the ketone results in a mix of (R) and (S) enantiomers.



In the body, this tautomerization is generally catalyzed by basic amino acids.  Specifically, albumin is the main catalyst in humans.

While this is beyond the scope of your question, the reason that only (S)-thalidomide causes birth defects is that it can insert itself into DNA and suppresses certain genes necessary for embryonic development.




Reddy - Chirality in Drug Design and Development
http://www.ncbi.nlm.nih.gov/pubmed/9860497
http://www.ncbi.nlm.nih.gov/pubmed/9499573