120Hz vs 60Hz

I already own an HDTV, an LG 47" 1080p from before TVs were branded with their Hz rating, so about 3 years old. I'm looking to add another HDTV to my home, primarily for TV/Blu Ray use but also some PS3. I'm trying to decide between 120Hz and 60Hz. I'll be getting a TV about 40" and while I'm very happy with my LG I'd also be ok with Samsung or Sony or any other top-end brand, but am not interested in Vizio or any other low-end brand.

My biggest concern is, is 120Hz worth the extra money? I've been looking at 40" LG 60Hz for about $550 at best buy and the same in 120Hz for about $850, and while I have no doubt that 120Hz is better, is it worth the extra $300??? Can someone explain to me what exactly the improvement is, and maybe a few people put in their two cents regarding if it's worthwhile or not? Thanks!