I believe current 120Hz monitors are only 1680 x 1050. I've read others who posted that 120Hz 1920 x 1200 (and 1080p) is technically possible, but pushes the bandwidth of dual DVI-D to it's limits, if not beyond.
I play games on a H-IPS monitors which includes FPS, Space Sims, and isometric turn based strategy games. I simply love my H-IPS monitors, sure my NEC is extremely expensive, and my Planar is just "merely" expensive, but I wouldn't trade them for any other monitors. Great for movies because color shift are significantly less than TN panel monitor which are the type of panels used in all current 120Hz monitors.
I do have an Asus VK246H monitor that is built using a TN panel, but it is used merely as an auxiliary monitor for my HTPC. I have played games on it 'cause I was writing a review of the monitor, but I didn't enjoy play as much as I do on my H-IPS monitors. Part of the reason is due to the lower 1920 x 1080 resolution. My H-IPS are both 1920 x 1200.
There are 120hz at 1080P not 1200 because bandwidth limit of DVI-D. Manfuacturers don't want to release monitors that only require mini displayport yet because nothing but current gen ATI cards can run them.
Only FPS's would expect any gain from 120hz. Games like RPG and RTS won't have any significant impact to your game play. Maybe you would notice it being more smooth but that won't make a difference like FPSs since. Games like SC2 and diablo and even WoW to some extent can be played on as low as 30FPS because not everything moves on the screen, only the units and not very fast at that. In shooters you can be turning around 360 degrees and everything moves flying in half a second. But seeing some SC2 unit slowly march accross the screen would be as smooth as it ever gets.
Go for the IPS screen, the quality is better.
I honestly don't understand why they don't make 120hz IPS screens. At 30" too and LED. I would buy one.
120Hz is also good for mouse control. If your mouse cursor is rendered at 120hz the movement is twice as responsive and accurate. This give RTS games and windows a much better feeling, and might make you more competitive in RTS games like Starcraft 2. Windows animations and general UI effects are also much smoother.
I believe they can do 120hz all the way up to 2048x1280. 2048*1280*24*120=7.55Gbps
Dual-link DVI = 7.92Gbps
Anyway, no reason not to migrate to displayport and eventually 2560x1600 @ 120hz h-IPS. Ask around and show theres a market for this stuff, especially NVIDIA