Yes there is a noticeable difference. It's subtle at first but you notice it a lot over time. VGA just looks a bit off on an LCD - the text isn't nearly as sharp, it ghosts a lot more on certain panels (ghosting/streaking) and sometimes it can even affect colours.
I ran dual LCD's for the past year; for most of that time, one was VGA and one was DVI - the VGA one never quite looked as good (let me tell you though, VGA doesn't look bad with certain cards. The VGA on my X600 Pro looks GREAT!).
For your main screen, definitely get DVI, it helps tremendously in games, with text, etc.