I've been happily using an 8800GS PCIe card with two monitors. I just added an 8400GS PCI card to hook up a third monitor. I can get the system to recognize both cards. When I install GeForce drivers, though, the monitors attached to the 8800GS go south. I end up in a situation in which a monitor attached to the 8800GS is the primary monitor, but it is unusable---the screen is black except maybe for a giant white square cursor. The monitor attached to the 8400GS works, but I can't open control panel or the NVIDIA Desktop Manager---or rather I can open them, but they open on the black monitor so they are unusable. I'm running Windows XP Pro SP3, by the way. When I boot Windows into safe mode, then I can use a monitor attached to the 8800GS without trouble, although in safe mode it is the only working monitor. I've tried the 191.07 and the 186.18 drivers.
Well that knackers my sketch, IIRC there was a limitation with AGP that you couldn't use the first PCI slot because they shared memory address's and I don't know if that limitation still exists today with PCIe.
I've started working on this in Windows 7 instead of XP. Just to clarify what is happening... When I have both cards in I have three monitors hooked up. Say that monitors 1 and 2 are on the 8800GS PCIe card and 3 is on the 8400S PCI card. When I boot up I get the post on 1 with no trouble. I make it through to the Windows 7 startup screen with the swirling lights. When it is time for Windows itself to start up, though, 1 goes black. 2 and 3 never get a signal.
What hasn't helped:
1. Driver upgrade
2. Changing which of two PCI slots I use.
3. Which card I set to initialize first in the BIOS.
I had a 512 8400GS that was actually only a 256 because it shared system RAM, which caused W7 to report my RAM as 3.5 GB instead of 4GB. This may or may not be the cause of your issue but it's all I can think of at the moment, sorry.