ScreenRecycler

ScreenRecycler allows you to use another computer as a second display. It uses VNC technology to connect your Mac with another computer, be it a Mac or Windows computer, over your home network.

You have to install a VNC client on the second computer (the one that will be your second display) for this app to work. Also, ScreenRecycler installs a driver that will force you to restart your system after you install it. But this only happens once. The app uses Bonjour to connect both computers automatically, so it is important that both machines have this installed. If you are trying to connect two Macs together, you can use the JollysFastVNC app that comes bundled with the installation DMG of ScreenRecycler. You simply have to put that on the second computer.

From the Preferences window, you can change some settings that might help you out if the connection is going to slow or you don't get the smoothness that you want. Keep in mind, though, that a solution like this will never replace having a second display physically connected to your Mac. From this window you can change the scan rate, compression and degradation. You can change the port number and set a few other options.

From the Menubar, you can easily uninstall or reinstall the driver.