var d = document.createElement("div");
$$('body')[0].insert(d, "bottom");
$(d).setStyle({width: "200px", height: "200px", border: "2px solid #000"});

$(d).getDimensions(); // width: 204, height: 204

function getInnerDimensions(element) {
  var el = $(element);
  var innerDimensions = el.getDimensions();
  innerDimensions.height -= parseInt(el.getStyle('border-top'));
  innerDimensions.height -= parseInt(el.getStyle('border-bottom'));
  innerDimensions.width -= parseInt(el.getStyle('border-left'));
  innerDimensions.width -= parseInt(el.getStyle('border-right'));

  return innerDimensions;
}

getInnerDimensions(d) // width: 200, height: 200