http://ubuntuforums.org/showthread.php?t=886519

This thread contains a day's worth of efforts to clear up the problem. I
finally found a discussion thread that had the answer:

http://ubuntuforums.org/showthread.php?t=722783

The above post had the answer. Take Synaptic and lay waste to everything
having to do with NVIDIA. Reboot.

I used ENVY to then automagically install the "new" driver from the
repositories.

After reboot I could configure my monitors using nvidia-settings

-- 
nvidia-settings will not recognize installed nvidia driver
https://bugs.launchpad.net/bugs/257409
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