i would really like to play quake live on a 120hz monitor.
Would you need to be able to have 120fps in order to appreciate the 120hz?
I was actually shocked to see that movies benefitted greatly from 120 and 240hz. I didnt realize that the players and blurays were outputting that many frames
that's not entirely accurate.
The tvs will put out frames as fast as it can, but most movies are still shot in 24 fps. Avatar I think was only at 30 fps. Watching a movie on a 120 or 240 hz screen will not look any better other than the fact that 240hz screens are expensive as balls and you get other bonuses not related to the framerate that tack on how good it looks.
The human eye won't really perceive a difference over 60fps unless it is watching things that are moving extremely fast and usually small (hockey is a great example of this).
The main drive for 240hz tvs is to get high sustainable framerates in 3D. Not because people want to watch things in 240hz.
For gaming, unless your game is running at 240hz the only benefit from having a 240 hz monitor for gaming is if the fps isn't locked. If it is locked to a standard fps (24,30,60), then it will look exactly the same on a really high quality 60hz screen as it would on a 240 hz screen because the game is only sending 60 frames per second.
More hz does not translate to higher detail, higher contrast, more colors, or anything that dramatically affects your viewing experience once you are over 60hz. It's much better to invest in high contrast ratios and better colors than a screen with a high refresh rate.