The binary drivers (listed below) available in the ubuntu repositories will not work by default for multihead displays:

• nvidia-glx-envy
• nvidia-glx-legacy
• nvidia-glx-new

Instead, the source for the nvidia-new driver needs to be downloaded and compiled. This is how you do that:
$ sudo apt-get install module-assistant nvidia-new-kernel-source
$ sudo m-a prepare nvidia-new-kernel-source
$ sudo m-a build nvidia-new-kernel-source
$ sudo m-a install nvidia-new-kernel-source

Shut down your currently running Xorg daemon:
$ sudo /etc/init.d/gdm stop # or xdm, kdm if you're running another display manager

Force the newly compiled driver to be loaded when gdm starts, by inserting the following line in your /etc/init.d/gdm init script:
( modprobe i2c-dev ; modprobe i2c-core ; insmod /lib/modules/`uname -r`/nvidia/nvidia.ko )

Make sure you’re X configuration file is configured for multihead display. You will need support for Twinview with Xinerama support.
$ sudo apt-get install libxinerama-dev libxinerama1 x11proto-xinerama-dev

Here’s my X11 configuration file (I left out the keyboard and mouse settings):

Section “ServerLayout”
Identifier     “Layout0″
Screen      0  “Screen0″ 0 0
EndSection

Section “Files”
RgbPath         “/usr/X11R6/lib/X11/rgb”
EndSection

Section “Module”
Load           “dbe”
Load           “extmod”
Load           “type1″
Load           “freetype”
Load           “glx”
EndSection

Section “ServerFlags”
Option         “Xinerama” “0″
EndSection

Section “Monitor”
Identifier     “Monitor0″
VendorName     “Unknown”
ModelName      “TOSHIBA Internal Panel”
HorizSync       64.0 – 65.3
VertRefresh     60.0
Option         “DPMS”
EndSection

Section “Device”
Identifier     “Videocard0″
Driver         “nvidia”
VendorName     “NVIDIA Corporation”
BoardName      “GeForce Go 6600″
EndSection

Section “Screen”
Identifier     “Screen0″
Device         “Videocard0″
Monitor        “Monitor0″
DefaultDepth    24
Option         “TwinView” “1″
SubSection     “Display”
Depth       24
EndSubSection
EndSection