That setting has been there since v1.2.5 at least. It should work. Actually, it is working.
If you want the shopping cart in the right sidebar, you will have to keep it enabled.
Your template's stylesheet has
Code:
.outer {
padding-left: 165px; /* Same width as margin-left for the float-wrap div */
padding-right: 150px; /* Our right column width */
}
which prevents the center column from expanding to the right even when the right sidebar is disabled. The background image probably has the right sidebar borders built in, and not under #navColumnTwo, so they stay when it is gone.