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I'm useing Arch Linux with KDE 3.5.8. I have two monitors, so I have configured x with two screens. It's working fine, and I get one KDE on each screen. But on one of the monitors, menus will go out of the screen if they are too long. This is not a problem on the other screen. Things like fullscreen and such works fine, its only menus as far as I can see.
Something about the desktop size seems screwy to me in general. For example, try resizing one of the desktop icons past the border of your screen. It had strange effects for me.
Actually, if you do this make sure you resize it back to it's original size and location and then log out and log back in to get your desktop back to it's original shape/size. That's what I had to do.