Looking at your Xorg.0.log, it seems that the
SubSection "Display"
Virtual 2720 1024
EndSubSection
in your xorg.conf is not honored. It looks like instead of only defaulting to
2048x2048 the new driver actually overrides the Virtual setting. I see no
mention of the number 2720 in your xorg.conf. If the virtual width is not set
to at least the sum of the width of your two monitors (which is 2720), you will
not be able to position the monitors side-by-side as one big desktop. I will
test on my computer if it also overrides my virtual setting (I have a 965GM).
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[GM45] LeftOf positioning not working anymore with 2.6.3-0ubuntu9.1
https://bugs.launchpad.net/bugs/370777
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