One of the annoyances I've had with *nix so far was the apparent lack of multi-monitor control from the GUI. I've have experience with TwinView using xorg.conf, which worked fine but was quite a hassle to set up.
A side effect of this is the fact that once set up, I never touched the configuration again. For a computer with 2 screens hooked up permanently, this is fine. For a laptop which is dragged along and connected to beamers, TVs and monitors - not so much.
The good news is that I run a modern linux distro which led me to believe that the multi-monitor stuff should be enabled by default. However, I am not using Kubuntu (which would probably auto-enable all new toys for me) but rather I am using Gentoo. So it took some digging to figure out what is going on these days and how to use it. On a side note: you could use 'nvidia-settings' instead after plugging something in but I'd rather use the automatic method.
First a word of warning: the binary NVidia drivers do not support RandR 1.2. I have the 195.xx drivers installed and NVidia expressed back in 2007 that RandR 1.2 support was a 'priority' feature. One that apparently needed more than 3 years to be released. This means that using the binary 'nvidia' driver will give you RandR 1.1 which does not support the on-the-fly hotplug for displays. Instead you are forced to use TwinView, define meta-modes for every possible configuration and switch to those using 'xrandr' (or use the nvidia-settings tool each time).
Since this sort of defies having RandR 1.2 support altogether in Xorg, I decided to ditch the binary nvidia driver in favor of 'nouveau': the open-source replacement for 'nv' with decent 2D acceleration support (although I couldn't resist and enabled the highly experimental Gallium3D support as well).
To start off: trim down your Xorg configuration to a minimum, note that a recent Xorg is needed (I have 7.4 at the time of writing). This is needed to enable the auto-detection of many things or rather: manually specifying properties will override auto-detected settings and cripple Xorg's ability to handle everything on its own. As an example, I have included my own xorg.conf below.
The "ServerFlags" section is pretty simple: use every auto-detection known in Xorg to hotplug devices. This means both monitors and input devices like mouses and keyboards.
Next up are the 2 sections for my NVidia display card. Since I am using 'nouveau' instead of 'nvidia', make sure you are not loading "glx" somewhere (if you were using 'nvidia' in the past like me, you most likely have that somewhere).
The last 2 sections are fairly simple as well but note that I do specify the native resolution of my LCD screen as the preferred resolution.
Thats it! Restart your X server and run 'xrandr' so see the result. I plugged a VGA monitor in my notebook and this is the result: