Help with buying a monitor!

I am looking at buying a new computer monitor used for gaming and watching videos/movies.

I currently have a BenQ 22" G2200W but I'm starting to think it's a little small, and it can only go up to 1650x1050. I was originally going to upgrade to a 24" so I could get the full 1920x1080 (or even perhaps 1920x1200) but then I started to think that spending $200-400 on a 2" upgrade is a bit much. So I'm starting to lean towards buying a 25" or maybe 26" or 27".
I don't really want to go bigger than that ^ because I was using my 32" TV at one time as my monitor and it was too big for me (:

I really would like to have a 1920x1200. I have $800 AUD but I would rather not go much higher than $400... And $400 is pushing it if I want to get a 1920x1200 so I am willing to settle for 1920x1080.

Also, some guidelines about buying a monitor would be good. What am I looking for when I buy a monitor? Refresh rate, contrast ratio, resolution? What is a good number for those specs?

So basically, I want to know:

1. What size monitor should I get (between 24" and 28") and what specs should I look out for (contrast ratio, resolution etc) ?
2. Recommendations/reviews on monitors. What do you guys think is a good monitor to fulfill my needs?



Here are my specs:

Operating System
MS Windows 7 Ultimate 64-bit SP1

CPU
Intel Core i7 2600 @ 3.40GHz
Sandy Bridge 32nm Technology

RAM
8.00 GB Dual-Channel DDR3 @ 668MHz (9-9-9-24)

Motherboard
Gigabyte Technology Co., Ltd. Z68XP-D3 (Socket 1155)

Graphics
1280MB GeForce GTX 570 (ASUStek Computer Inc)

Hard Drives
1954GB Hitachi Hitachi HDS723020BLA642 ATA Device (SATA)

Optical Drives
TSSTcorp CDDVDW SH-222AB ATA Device

Audio
Realtek High Definition Audio