I think the second resolution you propose is the better one: the idea that they're doing miracles but not displaying the fruits of the spirit in how they do them. The Greek word here, transliterated, is "pseudoprophets": prophets who are liars! And when you consider that a prophet (as the word is used in the Bible) isn't necessarily a miracle worker, but just someone who "speaks forth" a message from God, you get that a "pseudoprophet" is just someone who purports to have a message from God, but the message isn't actually from God. Jesus is saying here that you'll know whether a guy's a false prophet or not by the morality of his behavior.
By "morality," I mean real morality, just not what passes for it in our culture. I mean acting in a way that's loving, compassionate, promoting peace and justice, all these things. The fruit of the spirit, like you said, Dwight. I easily forget that that's what real morality is--something good that God is growing in you.