With "Sysinternals Desktops" each "Virtual Desktop" behaves as if it were distinct from the others (ie it's not just one big desktop that you see bits of at a time).
As Winphreak mentioned above, only Desktop1 uses Aero.
The taks bar only shows apps in the current desktop and you can only alt-tab between apps on your current desktop, however Task Manager will show all tasks on all desktops. Each desktop has it's own task bar and all the desktop icons are present on each desktop.
When you connect to an external monitor, it "grows" each desktop to fill both screens (same as if without "Desktops"). Again each external view is distinct from the others so if you have 4 desktops and 2 monitors you have 8 screens to fill with apps! Also, the screen resolutions for both monitors are replicated on all desktops so if you change it in one it changes the others.
Note that some popups (eg task bar alerts and program crash alerts) pop up only in the first desktop, regardless of which desktop you are on, so if something crashes, check desktop 1. However, the "You Have Mail" sound should play as normal even if your mail app is on another desktop.
BTW: I'm running Windows 7 on 17" MacBook Pro...
What I really desire is MacOSX Leopard - Spaces, but I don't want to reboot