News: it works now. The issue described above was just after installing 8.04. 
After having the problem above, I enabled the nvidia restricted driver.
Then when you asked about driver and log, I disabled the restricted driver 
again and tried this, and now it just worked.

Still some annoyances: 
1. I don't get both external and internal at the same time - only external OR 
internal. 
2. Cloned works, BUT only at a lower resolution - internal is 1680x1050 and 
external is 1280x1024, but cloned get only 1024x768 at most. Why not scale or 
crop the internal so that I can look at my screen when demonstrating something 
on the wall.

Anyway, I can use the default driver and a projector now.

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screen resolution dialog couldn't enable external display
https://bugs.launchpad.net/bugs/223798
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