Yes. The video quality will be lower when you use the VGA connection. The signal will have to be converted from digital->analog->digital. Whether this degrades the signal too much for you, is something only you can decide.
The card you get depends on the supported card type of your system. If it's AGP I'd try the
ATI Fire GL 4. I just picked one up on ebay for $41 shipped. I'm not positive that it supports two screens at 1600x1200 digital but everything I read made me believe it would work. If you want, send me a PM in a week and I should know for sure. If you're interested in playing video games, I wouldn't recommend this card.