Answer: Leaves are an excellent source of organic matter and in my experience shredded leaves make an excellent mulch -- and you can't beat the price! If you are especially concerned with possible diseases or pests you could certainly compost the leaves first in a good hot compost pile to mimimize the risks, but I have never felt it necessary to do so.
With regard to the nitrogen question, leaves are similar to shredded bark or any other organic mulch material in that the mulch will temporarily "tie up" a portion of the nitrogen when first applied. To counteract this, you could sprinkle some nitogen-rich fertilizer or aged manure on the soil prior to adding the mulch. However, if you are applying the mulch in the fall when plants have a reduced need for nitrogen, it shouldn't make a noticeable problem.
In general, using an organic mulch of any kind is a good thing to do and helps build your soil over time as it decomposes. If you have questions about the quality of the soil in your garden, the best thing to do is to run some basic soil tests. Your County Extension can help you with the tests and with interpreting the results. Their telephone number is 489-4315.
Enjoy those leaves!
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