Linux comes with automatic setup for dual-monitors like windows. However I found the gnome applet rather buggy and unusable. If you have been lucky in using it (look in System->Administration->Display) then you do not need to read further. However most likely you would still want to glance over the super simple setup for dual monitors on Linux / Fedora Core.

The first item in your list should be to get a dual-monitor capable graphics card. There are cheap video cards available from nVidia which provides a VGA and DVI output. I used GeForce 6200 LE card from nVidia with 256 MB RAM which provides for dual monitors with a VGA and DVI output. I had to use a DVI to VGA converter to attach the second monitor. It uses PCI Express slot. The following discussion will assume that you are using some dual display capable nVidia card for your dual monitor display.

The computer will automatically use the external graphics when available, instead of the in-built graphics card. You may also be able to change it in your BIOS setting. I have the setting automatically configured properly in my Intel 965 RY mainboard.

Please ensure that you are using the i686 kernel instead of i586 kernel as is often mistakenly configured by Anaconda installer. Please follow the guide for how and why to install i686 kernel on Fedora Core / Linux in 7 simple steps.

Linux ships by default with nv grahics driver which works very poorly with nVidia card. You must replace it with nVidia driver. Please follow the excellent guide to install nVidia graphics driver on Linux / Fedora core in 5 simple steps.

Open /etc/X11/xorg.conf and add, if not already present, Option "TwinView" in Device section. That is all it takes to enable TwinView, a nVidia technology to transparently enable dual monitor display in Linux within a single X-Window. This is different from Xinerama in that with Xinerama you will have the two screens in two separate X-windows. TwinView is simpler, faster and the recommended option.
Note: Alternatively, and in a simpler way, you can setup TwinView from Applications->System Tools->NVIDIA Display Settings

Reboot or restart your X-Window and you are done. Your dual display should be recognized and everything displayed correctly. You can drag one of your panel to the other window.

BTW: You can also easily add a third monitor to your dual-monitor display by using any old laptop to create a cheap triple-monitor display.

Dual-monitor is must for software development and is strongly recommended for any developer. Proponents of dual monitor also includes Bill Gates. I think dual-monitor has at least boosted my productivity by 20% or more.