It's actually an excellent question that I wish someone would answer. I've been shopping for a 17" LCD for weeks now. I cannot find enough information to make a sound decision.
At first I looked at the samsung 710T (because of the quick response time and rave reviews). But then I found out it uses 6-bit processing and dithering to achieve that quick time. In short, it "cheats" to get that quick response time by only displaying 16.2 million colors versus the full 16.7 million that 8-bit, non-dithering monitors display.
Then I found the Dell UltraSharp 1704FPT that is 12ms, but I cannot find the color support specification ANYWHERE. I've searched the Dell website thoroughly and talked 3 times to different tech support people (all in India, unfortuately). Also 4 emails to those folks as well. No one at Dell seems to know the answer.
I looked at the ViewSonic models, but their color specification only says "over 16 million colors". That's not a very complete description is it? If it's 16.7 million it's an 8-bit monitor. If it's 16.2 million it's a 6-bit (I've also seen these differences described as 24-bit and 18-bit). I'm guessing, but I bet the vagueness of their specification is to hide the fact that the monitor is only 6-bit.
So yes, there are some very fast monitors with 12ms and 8ms response times out there, but it looks to me like they're achieving that quickness by cheating via dithering.
Will you really notice a difference if a monitor can only display 16.2 million colors versus 16.7? After all, what's 500,000 colors? I can't answer that question yet. I haven't done enough research.
But the way I look at it, there are full 8-bit monitors out there with fairly quick response times. So the technology is there. So why buy a monitor that cheats?
I've either going to end up buying an LG 1710BK (16ms, DVI, 16.7million colors, dirt cheap: $304 at newegg) or keep searching for an 8-bit, 12ms response time (or lower) monitor. Maybe the lads at Dell India will finally get me an answer on that Dell UltraSharp 1704FPT. IF it's an 8-bit monitor, then I'll get it (12ms response, DVI, USB hub, $348).
But bottom line: I wish there was more discussion on dithering in LCDs. I'm getting the impression that it's a dirty little secret kept by the industry. And no one seems to want to discuss it.