in this peripherals section there is a monitor sticky by manofchalk which him and I produced. while it was never completely finished it does have lots of information you may find very valuable.
the easiest way to explain it is that there are "panel types" which include ips, tn, va, pls and various other subtypes as well as "bit depth" which includes 6bit, 8bit and 10bit.
bit depth refers to how many colors a panel can display. if it cannot display the propper colors then it dithers different colors together to make an approximate. this is most easily noticed on gradients and on dithered images it will look choppy and banded.
different panel types support different levels of bit depth. they also have their own unique properties. tn for instance has the fastest response times however is limited to only 6bit colors. ips covers the full spectrum as e-ips is 6bit and some of the other types reach well up into 8bit and 10bit territories however has a higher response time than tn. some, like va are typically 6bit but do have some variations which reach into 8bit and generally are midway between ips and va in response time.
generally IPS (not e-ips..) offers a more quality image (and greater pricetag!!!) while TN offers a lesser quality image however has a faster response time (and lower pricetag).
this is what an extreme case of dithering looks like
this is what extreme color banding looks like
on higher bit depth monitors (assuming your content is also higher bit depth and quality images.... or else it wouldnt matter what bit depth you had!) gradients would be smooth and images wouldnt be dithered.