Hi Stimms,
I'm going to assume you know what you're doing here, but I'll offer a couple of things to consider regarding performance considerations as well.
Regarding solving your need to stop the inner listbox from scolling, you can use blend to retemplate the inner listbox and replace the ScrollViewer with a ContentPresenter. This will stop it scrolling.
Be careful with performance considerations with nested listboxes. Particularly you want to try and avoid having varying lengths of your inner listbox (your data may already cater for this).
Variable height listbox items at best will disrupt UI virtualisation which impedes scrolling performance.
At worst, there are still reports floating around of people experiencing problems with being able to scroll to the end of lists (a ctp issue thought to be resolved in beta, but is still surfacing for some people.)
You might also consider alternative implementations to simplify what you're displaying, or perhaps using a more light weight control for the inner container. StackPanel for example. Granted you may like listbox for it's ability to iterate over your data. You can assess your own performance. I recommend testing on a device as this can vary from the emulator.
Lastly, you might also like to check out the guidance here that was put together not too long ago.
Silverlight for Windows Phone 7: ListBox Scroll Performance
There's quite a few comments there on keeping listboxes not too complex for the sake of scrolling performance on devices.
Listbox scrolling is very nice when performing at it's best.