Currently, there is a bug in the latest Nvidia drivers for Linux. It is the bug described in the following threads:
I suffer from the same “border anomalies” because I too, use Xmonad and Nvidia drivers, with two rotated screens. I lived with the annoyance for a few months (I even emailed Nvidia a bug report), until, by accident, I discovered a partial workaround — for all urxvt terminal windows. Since I usually do all my important work in urxvt terminal windows anyway (only exceptions being firefox and maybe OOo Writer), it really is a lifesaver. The fix for urxvt windows is as follows: in your ~/.Xdefaults file, put in the following property for urxvt’s resources, like so:
For some reason, this fixes the strange border behavior completely for all urxvt windows in Xmonad. I stumbled on this workaround when trying to make my urxvt windows transparent (which don’t work for me — probably because I use xwinwrap to play a screensaver permanently in the background).
BTW, I also use the option “urxvt*fading: 33” to make inactive windows fade out a bit, even though this setting is a bit buggy at the moment (probably as a result of the xwinwrap thing and also how Nvidia’s drivers are still messing things up in the first place). Still, the fading option is worth a try if you haven’t done so yet — it’s much faster to recognize active urxvt windows than from just using xmonad’s border’s alone (I use a 1-pixel wide white/black border in xmonad).
UPDATE November 11, 2009: Nvidia’s latest driver, 190.42, seems to have fixed this issue. Rotated screen + border issue has been resolved according to their changelog, and I have noticed the change myself in my desktop’s rotated monitor.