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You are right, in fact, I can move mouse from one screen to another and back, it does not lock up like I had previously in 11.2. I just don't have desktop and background on second screen. But that's ok, I can still use it. I would probably work in 11.2 also if driver was configured correctly.
Yeah, often you have to start editing scripts to get another window manager to start up on another display... This is particularly true with KDE4, which does not actually support separate screens. You can run KDE4 on one desktop, but not both.