Your xorg.conf suggests you have a dual-head card:
PCI: 1:0:0 RV350 [Mobility Radeon 9600 M10]
... well supported by free drivers.
What about OPs Matrox card?
Your xorg.conf is a tad confusing - for eg. you have two cards defined (needed for dual head) but one is commented out. In fact, most of the config for dual head is commented - well... most of the config is commented out period. You've been having fun haven't you?
But the suggestion to use Xinerama and set a large virtual screensize is the correct one for this case.
In your case, you could look into MergedFB, especially as you are using the free drivers (which support it). Xinerama assigns each screen it's own framebuffer which can limit 3D acceleration, and you need seperate screen, device and monitor sections.
All you need is an extra bit in the device section:
Option "MergedFB" "on"
Option "MetaModes" 1400x1050-1400x1050
Option "CRT2HSync" "75"
Option "CRT2VRefresh" "60"
Option "CRT2Position" "RightOf"
The screen section needs to be set up so that the normal resolution is that of the primary monitor and virtual resolution is that for both combined...
Virtual 2680 1050
Modes "1400x1050" "1280x1024" "1024x768" "800x600" "640x480"
Which I see you already have.
I notice you had config (commented) there for ATI BigDesktop.
Do the free drivers support this? I thought you needed fglrx and fglrxconfig to set it up?