I think some VNC based solution would be better for a second display on Linux. That's something I wanted to tackle with for a while now, and in a few days I'll have some spare time to actually try to do so :-)
As for the KDXG, I'm not sure if one could use USB networking for that. Another problem would be the browser, which is worse on KDXG (as long as you're not running the Kindle 3 software stack). I also own a KDXG, so I'll probably compile a native app (vnc viewer). Plus, there already are capable vnc viewers for framebuffers, I'll just have to make some small patches to properly update the e-Ink display. Then you would connect it to the PC via USB networking and start the viewer via launchpad. Expect some news at the beginning of next week, I think. Of course, that would be a different thread, as it's a different application then.