Does reponse time effect this?

Theoritically speaking, yes.

Response time means how long it takes for the pixel to change from one color to another. The more substantial impact is ghosting or trailing images.

Monitors are generally rated between 2ms - 8ms. There are a couple of 30" LCD monitors with 12ms response times. But those response times under ideal conditions. Actual response times can be as high as 40ms depending on what is being displayed.

What most hardcore gamers are concerned about is input lag. All monitors have some level of input lag typically ranging from 12ms to as high as 50ms. This is the delay between when the image is being rendered by the GPU and when the image is displayed on the screen.

It's called input lag, not output lag.

Basically all LCD monitors uses a form of overdrive which is why most have response times rated between 2ms and 8ms. Without overdrive response times would be higher.

I've read that there have been a few LCD monitors where overdrive actually increases (make worse) ghosting effects. Whether it is due to poor implementation and/or poor manufacturing standards, I am not sure.

hmmm after doing some more research, it seems like response time is not really related to input lag. For example, the Dell E228WFP has a response time of 5ms while the Iiyama B2403WS has a response time of 3ms. The Dell E228WFP actually has less input lag at 3.2ms versus the Iiyama B2403WS at 23.5ms!

Guess I'll just stay with my CRT...