It's because you aren't running nvidia-settings as root; I get the
problem only when running as myself, when root the problem doesn't
appear. Run gksudo nvidia-settings

-- 
When trying to save new X configuration, I get an error message: Failed to 
parse existing x config file '/etc/X11/xorg.conf'
https://bugs.launchpad.net/bugs/477309
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which is subscribed to nvidia-settings in ubuntu.

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