The thing most lcd monitors list is response time. That is the time it takes to change a pixel from black to white and back to black. Unfortunately they rarely list the other important part, latency. It takes time for the lcd controller to receive the signal , process it , send it to the actual panel. A response time of 2ms with a latency in the controller of 5ms would be blurry in gaming or fast action.
120hz lcd may look better not because the panels themselves are faster but because the controllers processing the signal are running at a higher clock speed and can convert the signal faster. There are also some 60hz displays that use the exact same controllers as 120hz models and the only difference is the firmware. The panels cannot display at 120hz because they have a higher response time than their 120hz cousins but they can be tricked into providing the same latency benefits.
um wow, not sure where to start with the mis information.
First off, 120hz means nothing. Refresh rate hasn't meant much since CRTs since LCDs do not refresh anything. For TV's 120hz means one thing and for monitors it means another. I'll explain both in a second after clearing up some other info.
Some of what Modelworks said was correct. Quite a bit was misleading and some was false. First off, with monitors there is a response time as he said. There is a grey to grey, the time it takes to change along the grey scale, and the black to white response time. Also, as he said, there is a latency.
Response time affects your "motion blur" or ghosting affect seen in games. Latency affects how many frames behind you are. Latency has almost nothing to do with how well a given frame looks in terms of quality. That is where he was wrong.
With a high response time, you get motion blur and ghosting with high action scenes when the changes come faster than the pixels can change color. They typically end up bleeding where some pixels are almost keeping up and others are not. Also, in most scenes, not everything changes rapidly so there is a bit of this disconnect. It's hard to describe more than that without witnessing it for yourself. Suffice it to say, response time has to deal with the quality of the frame in high action scenes. However, if the response time is fast enough, then the human eye can't even see the distortion that occurs and it looks seemless to us. Although technically motion blur is still going on, just we can't see it anymore.
Latency deals with how fast the monitor takes to process a frame and display it. Monitors with high latency can be several frames behind what is actually happening. When watching a video, this means nothing except when it comes to matching up sound with what is displayed on the screen. If your monitor has 30 milli seconds latency, then the sound needs to be delayed by 30 milli seconds as well.
The problem comes with high latency monitors and gaming. The higher your latency, the father behind in frames you are seeing versus the real action. In a first person shooter this could be a serious handicap. This is because if your target starts moving from a standstill, you could be shooting at a place they no longer really are in the game. Your aim would be off. Good gaming monitors have very low latency of usually 1 or 2 frames. Bad gaming monitors can be 10 or more frames behind.
The whole 120hz bit is more a gimmick with TVs than with monitors. Basically, with TV's in some high action scenes, even with a fast response time you can still get enough blurring and pixelation to be noticeable. A good example is watching a sporting event with lots of flash photography. Since black to white response time is slower than grey to grey on every TV and monitor, you still get visual problems. To fix that and improve visual quality, 120hz TVs introduce intended latency. The TV itself slows down and collects several frames. Then what it does is actually create inbetween transition frames and use smoothing algorithms and filters to clean up the image.
This makes the image much nicer and smoother even if it is a little less true to the source. Most of the time this is still seemless, but it can still cause some strange visual effects especially with the additional morphing frames are trying to smooth really black areas that are moving. You see what I call the black bobbing affect going on. I see this when I watch movies and say a person on screen has a really black beard and is walking. As they walk and bob up and down, the beard seems to slide a little around on their face and generate an after image. Some TV's are better and this is less noticeable. Some are worse.
Now you know what 120Hz in a TV is then it's time to explain 120Hz for an LCD monitor. It really maps to frames per second that the monitor is capable of rendering. Still, if you have a high enough response time and try to render frames too fast, the motion blur would actually be worse. If the response time is very fast 2ms or less on black to white then the motion blur isn't noticeable. The reason to have higher refresh rate for a monitor is to deal with image tearing without having to use Vsync.
Vsync for an LCD monitor forces the monitor and frames per second from the video card to match up. This introduces lag but increases image quality because you are not losing frames. If the video card is sending out more frames per second than the monitor is capable of rendering in time, you can lose frames or parts of frames as the monitor tries to keep up. With a 120Hz monitor you retain all the frames your video card can output up to 120 frames per second without losing those frames and having to using VSync. Without having to use VSync, that means you do not introduce additional latency to not lose frames.
In short, even if you have a true 120hz monitor, which means a monitor capable of rendering up to 120 frames per second from it's frame buffer, you do not need to have a video card outputting 120 frames per second. If the video card is doing 90 frames per second you are not losing anything at all. If your video card is going above 120 frames per second, then you could still be dropping frames and losing image quality due to image tearing. In which case the only way to fix that would be to turn on VSync but that would case latency. So basically, refresh rate for LCD monitors really should be "Max frames per second rendering capability." However, that doesn't have the same marketing ring to it.
Hope this answers all your questions.