At work, I have an external LCD monitor connected to a MacBook Pro running Mac OS X 10.7. The LCD monitor is vertically oriented so that I can read more on it.
I could not find any option to rotate this second display initially. I tried all the tips I could find but none allowed me to rotate the external display. People said you'd see a rotation option if you hold Command-Option and click on System Preferences, then click on Display (while still holding Command-Option). It was true. And it was only for your MacBook's built-in LCD display.
Turned out all I needed to do was to restart the laptop. The rotation option displayed itself after that. Perhaps there is some monitor capability discovery handshake that is only done at boot.