I cannot bring up the fullscreen mode in my guest Ubuntu 12.04 machine using Windows 7 when the external screen is not plugged in. I tried disabling the second screen in the guest OS and I get the same error:
Can not switch the guest display to fullscreen mode. You have more virtual screens configured than physical screens are attached to your host.
Please either lower the virtual screens in your VM configuration or attach additional screens to your host.
Any ideas?