Leopard Graphics Update does a de-rez on external displays

I have had this problem also.
I called Apple support. They made me run some reporting software on my system and send the results back to them but they still couldn't figure it out.
I tried for months to get it working.
I finally was able to fix it.
I ran a free program called Onyx. (link here http://www.titanium.free.fr/pgs/english.html) I cleaned everything out of my system. This worked and I haven't had any problems for the last 3 weeks.

the firmware update for the keyboard fixes this issue as well (at least on my mbp c2d 2.2 GHz)

The MBP problem with lid-closed operation is a real bug in the Graphics update. We just have to live with it until Apple releases a fix. Jeff is correct, the workaround is to boot the MBP with no external display connected, then plug one in and all is fine as long as you keep the lid up. The issue of the external monitor having the wrong resolution is a different issue, that might be related. This will happen if you boot the MBP with the external monitor attached. Sometimes the external display will be dark, or both dark and Detect Displays shows two ColorLCD displays giving the external the wrong resolution. This can usually be fixed by disconnecting, rebooting then attaching the display.

Not to be a hater, but does anyone remember when we paid a premium for the Apple hardware and OS so that we didn't have these types of problems?

Everyone should have waited for 6-12 months before upgrading to Leopard. I know I should have. Actually, that's probably pretty good advice for any OS release. Wait for the bugs to get worked out!

Well, here's my story. I purchased a MBP two weeks ago, and connected it into my Apple Cinema 20 in (purchased 60 days ago); it actually worked fine for a couple of days, and then when I tried operating the computer with lid closed, after clicking wireless mouse or wireless keyboard to wake up, it flicked on for a couple of seconds and then flicked off back into sleep mode. After escalating my call to a Product Specialist yesterday, Apple's support engineers appeared baffled; their advice was simply for me to return my MBP to Apple Store and swap it out for a new one (they thought it was a hardware issue, although after reading these comments, I sounds like there's a conflict within Leopard's operating software). It's amazing that Apple hasn't addressed this issue by now (or even acknowledged a that problem exists between their MBP and Cinema displays).

its actually funny because the graphics update actually FIXED this problem for me. I was having this very issue with my external displays, and then the update fixed it for me. Seems in fixing it for some, they borked it for others. Not good.

I have this problem as well, and here is how I get around it:
1. Start up my laptop without the external display hooked up
2. Connect the display after booting
3. Fixed (until the next reboot)

well, i also had trouble with my itunes on the external display. after a while it puts the whole machine in a kernel-panic-like situation. no responding at all. the only way out is to hard reboot… so i am back on the mbp´s display.

I have experienced a similar problem to this recently after a reboot with my external display attached and I HAVE NOT installed the graphics update. The only way I could get the correct resolution was to reboot without the display attached. If I tried closing the lid immediately after rebooting with the external display attached the machine would kernel panic.

Equally impressed with the TRON reference. =)