\documentclass[letterpaper]{article}
\usepackage[svgnames]{xcolor}
\usepackage{calc}
\usepackage{fancybox}
\begin{document}
\begin{center}
\shadowbox{%
\colorbox{Wheat}{%
\begin{minipage}{12cm}
\colorbox{BurlyWood}{\parbox[t]{\textwidth-\fboxsep}{\textbf{Short
Heading for this
Box}}}\par\vspace{1ex}
\small I am looking for a solution to my problem related to an extra
space indent in a
colorbox that is within another colorbox. Specifically, the
``inside'' color box is
indented about one space from the left boundary of the ``outside''
color box. See the
example code.
\end{minipage}}%
}%
\end{center}
\end{document}