ATI cards can do 120Hz for 3D. However, AMD does not offer any drivers for their cards to operate in 120Hz mode. You must purchase 3rd party drivers in order to do so. Why did ATI decide to do this? I don't know... save money from development time?
If you want 3D, then go with nVidia.
A 120Hz monitor requires a dual DVI-D connections; each DVI-D provides 60Hz. I am guessing ATI can be used at 120Hz if you want to be able to see more FPS than a 60Hz monitor can provide, but for 3D you must purchase 3rd party drivers as I stated before.