Having two monitors is a beautiful thing. Check out my setup below, 24 inches of widescreen goodness times two. They're both KDS monitors and while the dark colors don't come through as well as they did on my CRT, the extra space more than makes up for this shortcoming.
Once you start working with two monitors, it's hard to imagine having to go back. Normally I will have my main window open with Visual Studio and then use the second monitor for reference, having either code samples from websites, database structure, or whatever else I might need. This makes me significantly more productive because I can just leave things up on one screen I need to reference rather than either printing them off or having to switch between windows.
24 inches is borderline too big for the monitors though. It's great for how much code I can write going across one line, but I find I have to turn my head a bit more than I would like to see what is on the second monitor. I have two 19 inch monitors at work and its less head turning, but I miss the extra space on my main monitor.
Some people go wild with three monitors. I wouldn't turn down a third monitor by any means, but I don't see it as being that much of a step up from two. I mostly use the second monitor as a sort of reference, looking from one monitor to another. It's pretty rare that I need to check anything other than those two screens.
Going with a single monitor much larger than 24 inches would be another viable option and one I would explore if I had a spare several thousand dollars. While I'd like to have the extra space, I value the ability to maximize windows on multiple screens too. There is little I hate more than having to manually resize windows so they fit my work area (besides uncommented code and if statements without the curly braces obviously). There are applications available that let you divide a large monitor into chunks that you can do this sort of thing with, but it just sounds cumbersome to me.
Now the only thing left that I really need is a keyboard that doesn't look so woefully out of place as my eight-year old white Microsoft keyboard. And a Blackberry would be nice too.
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