have a fresh install of edgy here and i can confirm the exact problem as
mentioned above.

changing the device section as described above did fix the problem.

please see also 
https://bugs.launchpad.net/distros/ubuntu/+source/linux-restricted-modules-2.6.17/+bug/69680
as it related to the whole install process of nvidia-glx-legacy.

-- 
Xlib:  extension "GLX" missing on display ":0.0"
https://launchpad.net/bugs/63461

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