I've been experiencing this issue too, ever since 11.10, and still on 12.04. I've tried the nvidia drivers every few months but they still aren't working yet. I've even tried using the 304.51 drivers from the ppa:ubuntu-x-swat/x-updates repository, but still no luck.

The default ubuntu driver (vesa, I think, possibly nouveau) works okay, but I can't enable multiple monitors on it, and I can't change the display resolution to the native resolution or aspect ratio (display is natively 1920x1200; only options are available are 1280x1024, 1024x768, or 800x600).

Using the nvidia drivers causes a segfault every single time that X tries to start. Sometimes it manages to get just as far as the 'ubuntu' logo, but most times it doesn't. It displays a message along the lines of "udevd[xxx] inotify_add_watch failed: No such file or directory" a few times, and then does nothing further; I don't know if this is related.

I've included the output that I get which corresponds to the already-mentioned output:

From /var/log/Xorg.0.log:

[    17.923] (II) NVIDIA(GPU-1): NVIDIA GPU GeForce Go 7950 GTX (G71) at PCI:3:0:0 (GPU-1)
[    17.923] (--) NVIDIA(GPU-1): Memory: 524288 kBytes
[    17.923] (--) NVIDIA(GPU-1): VideoBIOS: 05.71.22.45.17
[    17.923] (II) NVIDIA(GPU-1): Detected PCI Express Link width: 16X
[    17.923] (--) NVIDIA(GPU-1): Interlaced video modes are supported on this GPU
[    17.923] (--) NVIDIA(GPU-1): Valid display device(s) on GeForce Go 7950 GTX at PCI:3:0:0
[    17.923] (--) NVIDIA(GPU-1):     none
[    17.972] (II) NVIDIA(0): Setting mode "DFP-0:nvidia-auto-select"
[    18.491] 
Backtrace:
[    18.500] 0: /usr/bin/X (xorg_backtrace+0x26) [0x7f8584167876]
[    18.500] 1: /usr/bin/X (0x7f8583fdf000+0x18c71a) [0x7f858416b71a]
[    18.500] 2: /lib/x86_64-linux-gnu/libpthread.so.0 (0x7f8583305000+0xfcb0) [0x7f8583314cb0]
[    18.500] 3: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0x4df1f3) [0x7f857d3a61f3]
[    18.500] 4: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0xde2f5) [0x7f857cfa52f5]
[    18.500] 5: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0xde9e0) [0x7f857cfa59e0]
[    18.500] 6: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0x8facb) [0x7f857cf56acb]
[    18.500] 7: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0x11102b) [0x7f857cfd802b]
[    18.500] 8: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0xc8b7e) [0x7f857cf8fb7e]
[    18.500] 9: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0xcd2b2) [0x7f857cf942b2]
[    18.500] 10: /usr/lib/x86_64-linux-gnu/xorg/extra-modules/nvidia_drv.so (0x7f857cec7000+0x4ae478) [0x7f857d375478]
[    18.500] 11: /usr/bin/X (AddScreen+0x171) [0x7f858402dbe1]
[    18.500] 12: /usr/bin/X (InitOutput+0x294) [0x7f858406d9b4]
[    18.500] 13: /usr/bin/X (0x7f8583fdf000+0x3d5ed) [0x7f858401c5ed]
[    18.500] 14: /lib/x86_64-linux-gnu/libc.so.6 (__libc_start_main+0xed) [0x7f858219876d]
[    18.500] 15: /usr/bin/X (0x7f8583fdf000+0x3daad) [0x7f858401caad]
[    18.500] Segmentation fault at address 0x238
[    18.500] 
Caught signal 11 (Segmentation fault). Server aborting
[    18.500] 
Please consult the The X.Org Foundation support 
	 at http://wiki.x.org
 for help. 
[    18.500] Please also check the log file at "/var/log/Xorg.0.log" for additional information.
[    18.500] 
[    18.503]  ddxSigGiveUp: Closing log
[    18.503] Server terminated with error (1). Closing log file.

From that long string of console commands:

  *-display
       description: 3D controller
       product: G71 [GeForce Go 7950 GTX]
       vendor: NVIDIA Corporation
       physical id: 0
       bus info: pci@0000:03:00.0
       version: a1
       width: 64 bits
       clock: 33MHz
       capabilities: pm msi pciexpress bus_master cap_list
       configuration: driver=nvidia latency=0
       resources: irq:16 memory:d2000000-d2ffffff memory:b0000000-bfffffff memory:d1000000-d1ffffff ioport:2000(size=128)
  *-display
       description: VGA compatible controller
       product: G71 [GeForce Go 7950 GTX]
       vendor: NVIDIA Corporation
       physical id: 0
       bus info: pci@0000:04:00.0
       version: a1
       width: 64 bits
       clock: 33MHz
       capabilities: pm msi pciexpress vga_controller bus_master cap_list rom
       configuration: driver=nvidia latency=0
       resources: irq:17 memory:d4000000-d4ffffff memory:c0000000-cfffffff memory:d3000000-d3ffffff ioport:3000(size=128)
Distributor ID:	Ubuntu
Description:	Ubuntu 12.04.1 LTS
Release:	12.04
Codename:	precise
Linux james-D900C 3.2.0-32-generic #51-Ubuntu SMP Wed Sep 26 21:33:09 UTC 2012 x86_64 x86_64 x86_64 GNU/Linux
ii  nvidia-current                                 304.51-0ubuntu1~precise~xup1            NVIDIA binary Xorg driver, kernel module and VDPAU library
ii  nvidia-settings                                304.51-0ubuntu1~precise~xup1            Tool of configuring the NVIDIA graphics driver


If there's anything else that you think would be helpful, then let me know and I'll try and get it. I'm hoping this can be resolved; it's been nearly a year since I've been able to use my display properly on ubuntu.