Here's a Temporal workaround if you're using compiz:
Go to Compiz-Config Settings Manager (install it if you don't have it) and in 
Window Decorations replace 'any' with '!(class=SeamlessRDP)' or if you have 
other options you can just add '&!(class=SeamlessRDP)' at the end (everything 
without the quotes). Note that if you grab it by the windows border it may be a 
little lag before it updates the position of the window, but if you alt+grab 
it, everything's fine

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Seamless mode using 1.6 in Intrepid doesn't hide window decorations
https://bugs.launchpad.net/bugs/275528
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