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Is it possible to remove the image borders?

Yes, with a bit of custom CSS. Copy and paste it into the Custom CSS box in Theme Options. This snippet will also hide the post format icons, since they look out of place without the image borders.

.content img,
#wrapper .post-tnail img {
   max-width: 100%;
   padding: 0;
   -moz-border-radius: 0;
   -webkit-border-radius: 0;
   border-radius: 0;
   -moz-box-shadow: none;
   -webkit-box-shadow: none;
   box-shadow: none;
}
#index .post-tnail .format-icon { 
   display: none;
}
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