Closing Macbook Cover shuts off DVI to VGA display output

I was told at the Apple Store that I could close the cover on my Macbook with the mini-DVI output to my large screen monitor and still operate my computer via wireless keyboard and the mighty mouse. When I close the Macbook cover the monitor (via the DVI to VGA) goes black and indicates it has lost display signal. How do I close the cover of my Macbook and use the DVI monitor???
The Energy Saving help information setting the sleep mode to Never does not work.

This should help you out.
Apple: How to use your PowerBook G4, MacBook or MacBook Pro with the display closed and a Bluetooth keyboard or mouse
Apple: How to use your PowerBook G4, MacBook Pro or MacBook with the display closed

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