Video card or monitor problem?

I often play Doom3 and HL2 with the 'show fps' options turned on. There are times where it's reporting 120+ FPS and I'm STILL seeing jerks and lag and general stutters. Anything below 60fps sometimes hurts my eyes because of all the tiny jerks and stutters I see. Generally unpleasant to play between 32-60 FPS. Would anyone know why? Maybe my monitor doesn't refresh fast enough to display fluid motion?

Monitor is a 2-3 year old KDS 17" X-Flat 1280x1024 60hz. I always play at 1280x1024.

System is:

AMD 64 3800+ single core @ stock
2Gb Patriot DDR400 2-3-2-5
GeForce 7600 GT 256Mb PCI-e
74Gb Raptor

Edit: clarification

Try setting the refresh rate on your monitor to its highest setting and turning on VSYNC in the game. That should keep everything synced up and reduce some of the jerks in the graphics. If you are still seeing the jerks, maybe your system is having some problems somewhere. I know my 7600GT would run Doom3 just fine and I have very sensitive eyes. Never tried HL2 but CS:S also ran just fine.

Thank you two for your replies.

Yes, I do see that VSYNC does help quite a bit. There's no more tearing....just lag now.

I did notice though that with VSYNC enabled that the games don't get over 40 FPS very much. Guess I need a new card to have decent smooth performance and reduced eyestrain.

Edit: Sorry, forgot to say that 60hz is as high as the monitor goes for refresh rate.