I still see the problem on my system even with the same version of xserver-xorg 
(1:7.6+7ubuntu7).
The workaround provided by Greg King (greg-james-king) works but if you close 
the nvidia-settings UI it won't open again (process starts but does not render 
the UI and it makes one CPU-core go to 100%).
Any fixes for this?

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https://bugs.launchpad.net/bugs/873375

Title:
  nvidia-settings freeze on activating TwinView

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https://bugs.launchpad.net/ubuntu/+source/nvidia-settings/+bug/873375/+subscriptions

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