I have a 120Hz Samsung TV from 2007. There are several things people should know about these televisions.
1. There is a game mode which is supposed to do everything possible to eliminate lag
2. There are 4 motion-interpolation modes including "off". The screen remains at 120 Hz refresh at all times, regardless of the motion interpolation setting.
a. in "off" mode there is no motion interpolation; frames are rendered as the TV gets them.
1) the TV may perform the 3:2 pulldown in "film mode" when the input signal is interlaced, e.g. broadcast TV.
2) I think that the alternative is "video mode"; I haven't messed with it.
b. in any interpolation mode other than "off" the motion becomes smooth, completely unlike 24fps film. I believe that most people who say they can't get used to the 120Hz processing mean they can't get used to the motion interpolation. On my LNT-5271f when set to max, the effect can be jarring, or it can be really neat. I often use it on nature shows and sports programming, not so much for feature films (occasionally for sci-fi).
3. 60Hz sets cannot display 24Hz signals properly. I don't know if judder bothers me, this is my first large TV. I can't set it to induce judder: it always renders 24Hz video correctly. It's awesome. I have not personally seen a 240Hz set; I can only surmise that the primary benefit is better motion resolution for programs like sports, video games, etc.
4. There are no TVs (AFAIK) which accept >60Hz video input. This means that there is no need for a extra-fancy HDMI cable (monoprice HDMI 1.3 cables are perfectly fine). It sounds strange that a TV might be 96, 120, 240, or even 600Hz, but all of these are sampling rates done internally to get an integer multiple of 24Hz to render films correctly.
All that said, I believe sports programming looks amazing with HD + 120Hz + motion interpolation. You should consider firstly the viewing distance: get a screen size which is appropriate (google for HDTV Screen Size vs Viewing Distance). This alone will likely point you toward the larger set. Next, check out the TVs at BB, find settings for the ones you like at AVSforum.com and calibrate the best you can (definitely get out of torch mode) and compare. Finally check for problems (all sets are imperfect on some way) with the one(s) you like best and see what you can live with. If it means saving for a little while longer, then do so. Prices will dive as we get closer to the Super Bowl.
I bought my TV as a long-term investment; like a refrigerator I don't plan on replacing it until it doesn't work anymore. Maybe you don't look at it the same way, but for me it meant doing my homework, saving, and finding the right time / price. BTW, I bought at Amazon; all research was done at AVSforums.com, as I live out in the sticks.