With the help of some links from Les Orchard, I have managed to enable the extended desktop on my iMac. It turns out that the hardware is perfectly capable, but it was disabled in the firmware because this was before the release of the G5, and Apple wanted to leave people some reasons to spend the extra money on a Powermac.

The effect is remarkable to say the least. Thanks, Les.

Sadly, I doubt I'll manage to hack in a third monitor. which is a pity, because it'd look so cool.