nVidia Geforce 8800 GTS (512) driver issue

First of all here's some vaguely relevant info:
OS - Xubuntu (Gutsy Gibbon) (64bit version)
CPU - AMD64 X2
Graphics - NVidia Geforce 8800 GTS (512 version)
My *nix skills - The grey area between n00b and guru

The problem:
I can't seem to get ubuntu to recognise and use my NVidia card. I've noticed a few other people around here with similar issues, but none of the solutions helped or I missed the solution for me. nvidia-settings comes up with a message saying "You do not appear to be using the NVIDIA X driver. Please edit your X configuration blah blah", but I've run nvidia-xconfig already. I've tried intalling nvidia-glx-new and I've tried installing the drivers straight from the NVidia site. But I still can get the OS to recognise the card.

The story (or there abouts):
- After installing Xubuntu I was immediately presented with a window saying something like "Running in low graphics mode". So I selected some roughly appropriate settings for my hardware to get me going.
- Then I ran Restricted Driver Manager, and that immediately came back saying "Your hardware does not need any restricted drivers" (lies!).
- I installed nvidia-glx-new from Synaptic Package Manager.
- After nvidia-glx-new didn't work I manually installed the NVidia drivers for my card and OS (from the NVidia site).
- nvidia-settings reports that I am not using the NVIDIA X driver.
- Ran nvidia-xconfig.
- Looked at xorg.conf (this looks worrying).
- Still have the same issues with nvidia-settings.

------ My current xorg.conf state ------

Section "ServerLayout"
    Identifier "Default Layout"
    Screen 0 "Default Screen" 0 0
    InputDevice "Generic Keyboard"
    InputDevice "Configured Mouse"
EndSection

Section "Files"
EndSection

Section "Module"
    Load "glx"
    Load "v4l"
EndSection

Section "InputDevice"
    Identifier "Generic Keyboard"
    Driver "kbd"
    Option "CoreKeyboard"
    Option "XkbRules" "xorg"
    Option "XkbModel" "pc105"
    Option "XkbLayout" "us"
EndSection

Section "InputDevice"
    Identifier "Configured Mouse"
    Driver "mouse"
    Option "CorePointer"
    Option "Device" "/dev/input/mice"
    Option "Protocol" "ImPS/2"
    Option "ZAxisMapping" "4 5"
    Option "Emulate3Buttons" "true"
EndSection

Section "Monitor"
    Identifier "Failsafe Monitor"
    VendorName "Generic LCD Display"
    ModelName "LCD Panel 1280x1024"
    HorizSync 31.5 - 64.0
    VertRefresh 56.0 - 65.0
    Gamma 1
    ModeLine "640x480@60" 25.2 640 656 752 800 480 490 492 525 -hsync -vsync
    ModeLine "800x600@56" 36.0 800 824 896 1024 600 601 603 625 +hsync +vsync
    ModeLine "800x600@60" 40.0 800 840 968 1056 600 601 605 628 +hsync +vsync
    ModeLine "1024x768@60" 65.0 1024 1048 1184 1344 768 771 777 806 -hsync -vsync
    ModeLine "1280x960@60" 102.1 1280 1360 1496 1712 960 961 964 994 -hsync +vsync
    ModeLine "1280x1024@60" 108.0 1280 1328 1440 1688 1024 1025 1028 1066 +hsync +vsync
EndSection

Section "Device"
    Identifier "Failsafe Device"
    Driver "nvidia"
    BoardName "vesa"
    Screen 0
EndSection

Section "Screen"
    Identifier "Default Screen"
    Device "Failsafe Device"
    Monitor "Failsafe Monitor"
    DefaultDepth 24
    SubSection "Display"
        Virtual 1280 1024
        Depth 24
        Modes "1280x1024@60" "1280x960@60" "1024x768@60" "800x600@60" "800x600@56" "640x480@60"
    EndSubSection
EndSection

-----------------------------------------------

[edit] *Ahem* Pressed the add button too early.
It would be nice to turn this expensive lump of metal and plastic into a fully functioning machine. I don't mind reinstalling the system if needs be, though I'd rather fix this here and now.

Thanks in advance for any info.

    ~Alice