I use 2 monitors on my desktop machine to manage my MC databases every day. Most of the popup action windows pop up straddling the monitors (in the center of the 2 screens) rather than in one or the other.
Is this a Windows issue, or a video driver issue, or ?
Likely a driver issue.
The way Windows "treats" two monitors can vary depending on how it was set up. If you go to the Screen Resolution settings in Windows (right click on the Desktop > Screen Resolution in Windows 7), do you see one big monitor labeled (1) or two separate monitors like this:
If it show one big monitor, then Windows treats it as though you have one large monitor. This is handy for "tricking" 3D games and other similar modes into running across both screens (AMD's EyeFinity mode and Nvidia's equivalent), but it also "tricks" applications when they say to center a window location (they do it properly, it is centered in the current "screen", there is just only "one" as far as Windows is concerned).
To disable this, you'll probably want to go through your Video card drivers. You want to configure Windows with an Extended Desktop (extend these displays), not via whatever fancy thing they provide. If you happen to be using the "fullscreen 3D" feature, both AMD and Nvidia have profile systems that can allow you to switch quickly back and forth when launching games.
If it isn't this, then you possibly have some Window manager that is futzing with the dialog locations. Any skinning or "monitor management" applications at all? Anything from the computer/device manufacturer?