In Karmic you are using KMS. With KMS the names of the outputs have changed.
VGA is now VGA1 and LVDS is now LVDS1.
These are the output names you have to use in xrandr commands.
So, most likely, xrandr --output VGA1 --right-of LVDS1 --auto will do something
now.
Please let us know if that solves the problem.
** Changed in: xserver-xorg-video-intel (Ubuntu)
Status: Confirmed => Incomplete
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xrandr unable to arrange monitors
https://bugs.launchpad.net/bugs/397769
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