What are the (non-escrow) methods people are using to minimise bitcoin transaction fraud?
One possibility is to use 2-of-2 multisig. This means that if the parties don't reach an agreement, the funds are lost so they have an incentive to cooperate. (This is still vulnerable to blackmailing).

Another is 2-of-3 multisig with a 3rd party. If the parties agree (which is usually the case) the 3rd party doesn't need to do anything and can't control anything. If the parties disagree the 3rd party can arbitrate. This means that for a problem to exist, one of the parties and the 3rd one must misbehave, which is by far rarer.

It is a mistake to think that Bitcoin means there should be no centralized services. It means that whatever can be decentralized, should be; leaving centralized services with a reduced role, leading to lower barrier of entry, lower vendor lock-in and more competitive service.