Is it possible to upgrade the iMac G5 to support a second display in "extended desktop" mode?

Officially, Apple states that the iMac G5 models include a Mini VGA port that supports "video mirroring", with the contents of the internal display "duplicated" on an external display using a VGA display adapter (sold separately). It officially cannot be used in "extended desktop" or "screen spanning" mode, where the external display can be used as additional "work space". The video system is soldered to the motherboard and cannot be upgraded.

However, the respective NVIDIA and ATI websites indicate that the video cards used in the iMac G5 models have the capability to drive two displays independently. This indicates that the hardware is capable of supporting an external display in "extended desktop" mode, but Apple disabled the feature to protect sales of more expensive Macs.

Unofficially, while disclaiming that the author is not "responsible for any damage that you might do to your computer" there is a hack called Screen Spanning Doctor that allows many, but not all, iMac, eMac, and iBook models to support a second display in "extended desktop" mode. Describing his script, Klaus Rutemoeller says the following:

I assumed that the ATI driver reads the value of a variable defined in the Open Firmware and decides, depending on the value of that variable, whether to limit the external screen to mirroring.

The key was to find that variable and to change it to a value that would cause the driver to allow the dual head feature [also called "extended desktop" and "screen spanning"]. I was lucky and found the variable and came up with a firmware script that changes this variable every time you turn on [many] iBook, [iMac, or eMac models].

The author's website has a great deal of additional information about the script including a list of supported machines.

It's ultimately your decision whether or not you would like to consider "unlocking" additional functionality that is not supported by Apple. However, it does appear that there have been many users who have successfully used this script to support dual displays.

Starting with the iMac "Core Duo" models, Apple officially supports dual displays on the iMac.