I have got the exact same issue. I have a NVIDIA GTX 260 Core 216 and I experience the same issue as described by the topic creator.
I have two screens, one 1360x768 on the left and the other (my primary) 1280x1024 on the right. All my icons appear on the left screen and my attempts to move them over by drag and drop fail.
Trying to drag my mouse over the entire desktop reveals something very strange. The blue "select box" will visually stop although the mouse will keep going as it approaches the right edge my my 1360x768 left screen. It does seem that the desktop "icon area" is different than the desktop area in total.
Everything else seems to work, I can right click anywhere on the desktop, and move windows to either screen without issue.
Windows 7 build 7057 x64.
I have also tried both the Windows 7 NVIDIA drivers
and the Windows Vista drivers without success.