Well I know for a fact that iMac G5's and iBook g4's cannot use extended desktop by default under 10.4. This is not a hardware limitation but a software one. Apple used this to provide more of a difference between prosumer and consumer machines.
However, there is a freely firmware hack available which would void your warranty, but allows extended desktop.
In addition, I have not tried this with Leopard or newer iMacs.
The hack to be used AT YOUR OWN RISK can be found here: