It disables Windows 7's auto alignment of windows, a feature which you can actually turn of manually without using shift window. Its in the control panel, easy of access, change how my mouse works, prevent windows from being automatically arranging... The difference being that Sift Window does it per-application instead of OS wide. To be clear, Shift Window makes changes to how the OS behaves regarding that program, as opposed to how the game behaves. Hate to say it but if anyone did get banned for using it and /really/ wanted to fight it, they would have more legal ground to do so than someone who uses an SLI profile to improve performance.
Personally, I say just turn off the arrangement feature. It means you can't drag your window to the top of the screen to maximize it, but who cares, when you can still click the little button or double click the window's bar?