Hey,
Greatatlantic is right, what fraps displays is the FPS rate of what the GPU processes. Recently other methods are also being used to test performance (toms has a great article on it), but FPS rates are still a significant way to measure the performance of a GPU.
As for your monitor as it is 60Hz it can only display 60FPS, that doesn't mean that the GPU cannot output a higher frame rate. If you want to take full advantage of your FPS rate (assuming its above 60FPS) you can get a 120Hz monitor, although that is completely unnecessary as the difference is marginal at best. You can turn on Vsync to cap the frame rate at 60fps, if you are using an nvidia card enable adaptive vsync in the nvidia control panel. Even if you are getting say 85fps, your monitor can only display 60, that can lead to screen tearing, which is why vsync can be useful in such situations.
Hope this helps!