Ok, I solved this issue with help from a blog on the web. Here's the relavent procedures, and a pic of the compiz-fusion cube running on a T61/P. The procedures were changed to work on OpenSUSE 10.3. Sorry, I lost the link to the blog so I can't credit the writer, but if I find it I will do so.
1.) Connect the external monitor to the laptop directly. (leave laptop lid open)
2.) Install the nvidia drivers. From the nvidia repository I installed - nvidia-gfxG01-kmp-default-100.14.19_2.6.22.5_30-1.1 and
x11-video-nvidiaG01-100.14.19-4
Note: At this point the external monitor will still black screen on boot, but the internal LCD woks.
3.) Open up a terminal, get root access using 'su', and type "nvidia-settings &" at the prompt.
4.) Within nvidia-settings, select "X Server Display Configuration". It should show two monitors in a box called 'layout". The external monitor may be disabled.
5.) Click on the external monitor's icon, then click "configure", then select "separate X screen".
6.) Click on the laptops screen's icon, click "configure", then select 'disabled"
7.) Back-up your /etc/X11/xorg.conf file.
8.) Click "save to X configuration file"
9.) Reboot to test.
10.) Hook everything back up in the dock. Repeat steps 3 to 8 while the laptop is docked (with the Thinkpad's lid open) if it still black screens on the external monitor at boot.
Note - the method above will allow the Thinkpad's LCD and the external LCD/monitor to function separately on boot but not together. You want dual-head for that functionality.
The results -
Compiz-Fusion Desktop