I am running f17 x64, fresh install. I am using the akmod driver for my nvidia 570GTX.

Desktop Effects apply correctly, and most can be toggled, but specifically Outline does *not* disable. No matter what the toggle is set to, all windows have the "blue" outline decoration. As a dual monitor user, this is really, really (really) annoying, as any window docked to the side of my workspace pushes the Blue Outline into the other workspace, on top of my other windows.

I am open to any suggestions. So far only disabling Desktop Effects entirely can fix this. This was not a problem for me under F16.

If you just don't like those blue outline decorations, you don't have to disable desktop effects.
That effect belongs with oxygen decorations, and you can take it off from System Settings → Workspace Appearance → Window Decorations → Configure Decorations → Shadows.