Your xorg isn't the issue...your monitor is. Either set up your monitor at the resolution it's telling you to, or drop the resolution on each screen to something the HP monitor can handle.
I tried changing the resolution to 1920x1200 for both the monitors but when I restart X, it fails, giving me the error 'Requested Entity already in use'.
One more thing that I noticed was that the System->Administration->Display Settings: Hardware Tab has the Monitor Type listed as the HP one, but the display is only active on the NEC monitor. Also under the Dual Head Tab, the monitor to the left seems to be selected as the single head, which should not be the case as the HP monitor is on the left, while the NEC is on the right.
I am thinking that the OS thinks that the only monitor it is connected to is the HP one, at 1600x1200 resolution. When I just change the resolution to 1920x1200, it changes the resolution on the NEC monitor (Which completely screws the display up).