It can be done, and it is very handy. It mostly depends on your video card. Matrox was, and probably is unsurpassed for 2D. Unfortunately when it comes to 3D, Matrox can't follow. Not even the Parhelia.
I have now a Geforce2MX 32MB that allows for dual monitor setup. I did try it out, and it worked flawlessly, yet, the 14" monitor being old and allowing only for 640x480, I didn't continue this.
I'm musing on upgrading my comp one day, and then I'll go to 128MB videoram, and dual planes. Radeon9700Pro or Ti9600...???
Good news for mac users: in the next version of OSX, codename "Panther", mac will support more that 64mb video ram, and they will try to implement the dual planes also. Take that together with the new IBM processors, and the G5 (codename Zoo
)will be a formitastic puter. I wonder whether they will keep the L3 cache...
Another advantage of having dual monitors is built-in in Photoshop:
You know you can use the duplicate command so as to have two copies of your work open. This allows you to see the changes you apply. These can be on two different monitors. With docked palettes and the habit of using shortcuts for your tools, this can indeed be very handy.
Then you also have Duplicate's sister. Very handy for detail tweaking and painting indeed. Go to Window>Documents>New Documents or, if you're on PC, use the shortcut Alt+w+d+w. This opens the same image in a new version, allowing you for example to zoon into one in detail and see the global effect on the other one. Great also if you image exceeds your screen real estate. Then you can keep one at actual pixels and one to Fit on Screen. Curves/Levels becomes so much handier...