I am thinking about getting a monitor that will be used ONLY for my PS3. What should I look for(contrast ratio, response time, aspect ratio, connections, features, native resolution, ect.)? Do you have any recommendations for a specific monitor? When I looked at the monitors at amazon.com, I didn't see any of them that said it has HD support. For TV's, usually they say things like 480i, 480p, 720p, and 1080i digital compatibility. But for the monitors, how do I know what resolutions it supports? How do I know if I can use 720p, 1080i, or 1080p with it?

i just ordered a BenQ FP222WH
its a 22" LCD monitor with vga,dvi, and an hdmi input
i've read reviews from newegg, and hard forums that states that it can accept 1080p signals.
it downscales the 1920x1080 resolution to fit the 1680x1050 maximum resolution.

if you want to be on the safe side, get a monitor that has the native resolution of 1920x1200
the cheapest one I've seen is the 24" westinghouse on newegg for 450 after rebate. it has an hdmi input + component and composite. i was planning on getting this monitor but it was out of my price range.

but to answer your question about specs:
response time- TV response times are 8ms+ i believe, but monitors tend to be faster, the BenQ is 5ms and the westinghouse is 8ms
aspect ratio- widescreen 16/10 is more vertical room than 16/9
connections- hdmi or dvi, component is kind of rare to come by on a monitor smaller than 24"
features- none that i can think of, but samsung monitors have a "game mode" i think, but i know that the 22" samsung only supports up to 1080i
native resolution- 1680x1050 if you're on a budget like me
1920x1200 for true HD picture and not a downgraded signal.

links:
http://www.newegg.com/Product/Product.aspx?Item=N82E16824014139 (BenQ)
http://www.newegg.com/Product/Product.aspx?Item=N82E16824255001 (westinghouse)
http://www.hardforum.com/showthread.php?t=1167698

i can confirm if the BenQ can support 1080p when it gets here.

Thanks! If I want a monitor that has a DVI connection, could I use an HDMI to DVI wire and still get the benefits of using a normal HDMI to HDMI wire? My budget is around $200-$300 and I am looking for a monitor between 19" and 23".

yes, dvi and hdmi are backwards compatible, but video only (duh) to get sound you'd either have to use the optical output or have an hdmi receiver, run the PS3 through that to output the sound, then have the receiver output the video signal thru and hdmi-dvi cable. but that BenQ doesn't have built in speakers anyways, but built in speakers aren't any good anyways, like on the westinghouse. but i guess you could use them until you save up for a speaker system of sorts.
actually what i am doing, since i don't have a surround sound system yet, im hoping that i can still output sound via the RCA cables, lol it sounds so stupid though, but im going to try it.

I have heard that someone connected their HD Dish Network Reciever to their monitor. Would it be possible to connect a set-top cable box to a monitor? And can you connect external speakers to the PS3 itself(I don't have my PS3 yet and I don't know as much as most people here about electronics)?

if the cable box outputs hdmi, dvi, or vga, then yes, you can hook it up to a monitor.
as for speakers, they need to be plugged into a receiver of sort where the audio signal is processed. there are 5.1 speaker systems for as low as $150 on the market that have an optical input.

Why not just buy a lcd hdtv....?

Why not just buy a lcd hdtv....?
I watch a lot of SD channels and an HDTV might not look good with SD. I might get a Polaroid HDTV, but I watched an SD channel on it at Walmart and it didn't look good. I will either decide to get a monitor for gaming and an SD LCD TV or the Polaroid HDTV.