This is an interesting one. "Displays" in system preferences worked once, very briefly a while ago. Playing around with it, I swapped the finder menu bar to be on the second screen. However Displays is back to its old trick now of making System Prefs crash when clicked.
So, I could disconnect the second monitor but then I wouldn't have anything to run Finder in...
Everything else in system preferences runs fine- including the screen saver setup, which recognises that there are two screens running an expandable desktop.
I have tried creating another user profile, and running system preferences - display from that. It crashes. I have run Disk Utilities and verified permissions... it picks up a few minor errors (rwrwrw should be -rw -rw etc), but nothing major(?). And those get fixed OK.
Please help, this is really starting to worry me- especially as I now have a new, clean install of OSX10.2.8