Comment 7 for bug 390816

I also have the problem, that when I close my laptop's lid that my external lcd is blanked.

But I found a way to prevent this. You have to start: gconf-editor (via terminal)
There you can find the options you need at:

/apps/gnome-power-manager/buttons

You can change the parameter: "lid_ac" to the value "nothing" (without "") to prevent your external lcd from being blanked. That is the option for ac connection. If you run on battery you should also change lid_ac.

From now on it should also be accessible via system->preferences->powersettings (sorry I am not sure whether it is the right name at the english translation).

In my opinion it is very deplorable that you can't access this option via the gui that is build for that (even on karmic). :(
Hopefully it will integrated into 10.04, it is just a drop down item. :(