I'm currently running 3 desktops on two monitors using a dual-head matrox video card on Windows XP Pro. The capabilities exist.
At work, I have 12 virtual desktops on one monitor. Some lucky stiffs here at work have two monitors and one guy runs 20 virtual terminals for image processing!
Of course, if you want, you can also multiple X sessions, which many here do...so the truly insane could run, say 140 virual desktops.