Daniel, Bernie, I had the same issue with floating icons on drag. It was
under 11.04 where dash on primary monitor worked (the exact same monitors
config as Bernie's).
So I don't think the floating icon bug it's related to this one.

David,
When I had nvidia, proprietary driver, I succeed writing down Option
"Primary" "true" under relevant "Monitor" section in /etc/xorg.conf.
This was under 11.04 but may help you.

Have you managed to get dual screen working under 11.10 with nvidia?
Are you able to rotate single monitor screen?

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https://bugs.launchpad.net/bugs/742544

Title:
  Launcher is shown on the wrong screen in some multi-monitor setups

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