Try running the Windows Update Readiness tool:
http://support.microsoft.com/default.aspx/kb/947821
You can also install a lot of updates using the Service Pack Stand alone installers.
Get SP1 here, and then after installing that, install
SP2.
Your second monitor should be automatically detected when you plug it in. However, if it is not press WINDOWS LOGO key + X to open up the Windows Mobility Center (or simply type "Windows Mobility Center" in the search box on the start menu). Then tell it to
"Connect Display." (To be honest I don't know if that works on desktops or only laptops, but you can try. You should also be able to get to display options by right clicking on the desktop.)