Card: GeForce 8400 GS, Dual Monitor Solution 59 pin socket (
DMS-59) to 2 VGA adapter cable (tried two of these cables)
Driver: 306.97 October 2012 - latest driver and clean reset install
Nvidia driver 285.62 from Oct 2011 is the latest driver to dual display.  And all previous drivers back to 185.93 from May 2009 work as well.  Also beta 290.53 works. 
But 295.73 from Feb 2012 and later will not dual  display. I noticed that 295 and later drivers reverse the monitor numbers 1 and 2 from the drivers 285 and previous.
My XP computer with the same GeForce 8400 GS (VGA & DVI output instead of 
DMS-59) works with the latest 306.81 driver. And Ubuntu 10 dual displays fine too.
Less important details:
Windows 7 64 turns off the monitor 1 signal after startup. At login,  it  powers off monitor 1 and powers on monitor 2. Windows 7 behaves as   though  dual display is working even though monitor 1 does not display.   It's the same for single display, the monitor will not work on cable 1   except at startup.
Same  Resolution: 2 of the 4 monitors I have tried have the exact same    'recommended' resolution  (1280X 1024), both 60Hz, and even chose 16  bit   color for both instead of 32 to reduce resources.
 
Both 'Extend  these displays' in Windows Screen Resolution and 'Extend'   in  the Nvidia Control Panel is selected. And changing which one is   primary does not turn on monitor 1. Nor does  switching the position of   display 1  in either (ex. left/right/top/bottom).
 
My Windows 7 64 is an upgrade from Vista 64. One person in another forum   with the same problem resolved theirs by reinstalling Windows 7. But   another got the same problem only after a fresh clean install of    Windows 7 64 with the same GeForce 8400 GS and DMS-59 when it had   previously worked in Vista. 
Link Removed
 
Pushing a menu button on monitor 1 does wake it up, but just says,
1: Analog Input in Power Save Mode 
Press Any Key on Keyboard or Move Mouse