I just installed Ubuntu 12.04 and had a very similar problem to this.

Initially, my second display was showing as disabled and it wouldn't let me enable it

The command "sudo nvidia-settings" was very useful, as I couldn't find a way to get into these setting via the GUI

I managed to enable the second screen but upon restarting the X server it totally crashed my PC. I shut the computer down, it restarted and both screens came on.

Now I had a new problem. The second display would not show the back ground image, it was just white and when I tried to open up the display settings window to change it, the window did not open properly. I was able to change the settings (although it had no effect) but I could not close the window, move it to the primary display or open up the display setting window on the primary display. Very annoying.

I got around this problem by removing both of the default nvidia drivers from my system. I restarted my computer and it worked perfectly.

Having the launcher bar showing on both screens is a bit annoying, still trying to figure that one out.