The 'Shade' option now appears to leave the borders of the shaded window in their original place, rather than rolling the window up so that only the title bar remains. I don't know if this is really a bug or just an extremely misguided 'feature' but it probably ought to be fixed. It's far less useful in its current state than it was before.
This happened when John Harper (author of sawfish) added a new window class for shaded windows. Older sawfish themes have the effect you are describing if they have not been updated. We should check to make sure all of our 'shipping' themes are updated - hp?
AFAIK the shipping themes work. What theme are you using?
Please reopen if there's a specific theme we ship displaying this behavior.
It's the CoolClean theme, and it does seem to be working OK now - it was only on upgraded boxen that this was happening. Closing.