I'm using DWMBlurGlass (been using it for a few weeks before installing WindowBlinds) and I'd turn it off if that's what causes it but I'm not sure how to turn it off.
EDIT: I uninstalled DWMBlurGlass and now the windows don't have that prominent edge around them anymore, that fixed it! 
Mods, feel free to delete this thread now that the problem has been solved.