I believe the root issue here is that nVidia is being a laggard at
implementing proper xrandr 1.2 support in their driver.

In theory we could kludge around this by making jockey, gnome-settings-
daemon, and nvidia-settings aware of one another, I see nvidia is
finally getting around to implementing randr 1.2 support.  So this bug
will get solved once that's out.  In the meantime I don't feel it's
worth the developer effort to implement workarounds.  Users will just
need to be aware that nvidia-settings and the gnome setup tools aren't
compatible.

http://www.phoronix.com/scan.php?page=news_item&px=NjkwMw

** Summary changed:

- gnome-settings-daemon conflict with Nvidia Xserver settings in 8.10
+ [Needs xrandr 1.2] gnome-settings-daemon conflict/incompatible with Nvidia 
Xserver settings in 8.10

** Changed in: nvidia-settings (Ubuntu)
Sourcepackagename: xorg-server => nvidia-settings
   Importance: Undecided => High
       Status: New => Confirmed

-- 
[Needs xrandr 1.2] gnome-settings-daemon conflict/incompatible with Nvidia 
Xserver settings in 8.10
https://bugs.launchpad.net/bugs/300287
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