yes you will need to add a second video card that can handle 2 monitors. Last I used multi monitors with windows xp, XP couldn't run any 3d acceleration for videos outside the primary monitor. So I had to disable 3d acceleration in order to play video on the secondary monitor. Also certain games would disable the secondary monitors while playing full 3d games.
I use vista and found that I can do the things you want to do. However moving freely between the multiple windows proves impossible with certain games. Which is why I run the games in windowed mode whenever possible.
I just want to let you know i've only done this with 2 monitors on a single gpu. I don't know if it will quite be the same with a second gpu.
I'm looking for a usb2dvi box to add an extra monitor via usb. I'm only seeing 1600x1200 max res online but its good enough for my needs. I've used dual monitors with onboard + extra vid card before but the last one I setup had onboard + vid card with 2 outputs (3 output total) but the mb wouldn't allow onboard to work with the vid card.