1.) the monitor i want has a max resolution of 1280 x 1024
my video card supports dual monitors and has a max resoltuin output of 2560 x 1600
will I be able to use this card to run two of these monitors?
You pretty much answered this question on your own. As long as your video card specifically says that it supports dual monitors, it will support dual monitors.
2.) Also does having dual monitors really affect the video card for example if my card barely plays fear on high resolution on a 17" crt monitor is it still going to be able to run it on high wil dual 19" lcd or will the performance really go down?
Will the performance go down? Not if you have the hardware to back it up. If your Power Supply, Processor, and memory are high enough, you will not see a performance difference. The difference you may see is in picture quality. Obviously LCDs will give you a "sharper" picture but some people believe that CRTs still out class LCDs in overall picture quality. As with anything, experimentation is key.
3.)If you have two identical computers and monitors and one is hooked up via dvi and the other via vga is there a huge difference?
Not that I have seen. Some may say that DVI is much better than VGA and vice versa. It is all about preference. The best way to tell is to see for yourself. I may have mentioned this to you in one of my other posts but experimentation is the best way to learn.
4.) say you have two video cards one pci and one pci express can you hook one monitor up through the pci card and one monitor up through the pci express card?

I am sure of it. I would highly advise you to make sure your Power Supply and your RAM are high enough so that you can support a dual video card setup. If you have one video card that can support a dual monitor setup, there is no need to get two video cards to support two monitors.
5.) and lastly if your playing a video game lets use oblivion for example and you have dual monitors will the game only be displayed on one and on the other will just be your background or can you get it so the game is displayed on both monitors
No, the game will more than likely load on the primary screen. I have three monitors and when I play games, the games always load onto the primary monitor. You may have an option to configure your game to play on the second monitor but the settings may need to be adjusted.
This is my personal Dream PC:
http://forums.pcworld.com/blogs/mphenterprises/2007/12/21/my-gift-to-myself