My setup is a Linux system with two 19" displays. This is how I manage my space. I have 8 Virutal desktops. Each one is dedicated to a project. The left hand display is what I call my sticky desktop. Anything that I need to follow me around are put on that screen, and then set to follow me to each desktop. The right and screen is my work area.
I typically have 4 projects going at once, have my IM client on the sticky side, and a xterm open with vim running for notes.
This setup has worked perfectly for me for two years now. Never could justify a third display, not even sure what I would use it for, but I have to admit the idea of the center display being the focal point, and the other two displays being off to the side is appealing.
-Fratm