the "FPS" rate is what the graphics card is processing per second.
in actual fact, an LCD doesn't "refresh" at ALL, unless something on the screen changes. so if you were just sitting on the desktop with nothing changing (what about the clock?
), your monitor would never refresh. CRT's on the other hand did have to refresh 75 times a second or whatever.
so yeah, if your graphics card is processing 120 frames a second, thats all well and good. but if your monitor is only refreshing 75 frames a second, the extra frames are effectively wasted.