I think this is a hard question to answer since TV manufacturers don't exactly seem to have a definitive answer themselves. In any case, It could be assumed that since "960" rates are only found on top-end models (ES8000, HX929) that it takes into account variables like refresh rate (240Hz) + BFI + backlight scanning/strobing + image processing or something. While 960 represents the ""best" motion handling, I don't think it means it's equivalent to 960Hz. Seems more like an arbitrary number picked by the manufacturer to slap another marketing label on the spec sheet and a good excuse to obscure the real refresh rate. I doubt there will be a large discernible difference between 720 and 960 rates, if any.
Case in point: Sony's 2010 XBR909 had an advertised refresh rate of "Motionflow 240Hz PRO" (Pro indicating the use of black frame insertion) The 2011-12 XBR has a rate of "Motionflow XR 960"
ht Panasonic 60" ZT60, Monitor Audio: Silver RX6, RX Centre, Radius 90HD; Martinlogan Dynamo 700, Marantz SR5006, PS3, Oppo BDP-103D
2ch Sony KDL-32W650A, Sony BDP-S1000ES, Marantz PM8004, JVC T-X3 tuner, Monitor Audio Silver RX1, REL T3, Apple TV, Peachtree Audio DAC•iT, Sennheiser HD598
lr Panasonic 50" ST60, Sony BDP-S5100, Apple TV
pc Energy CB-5, Audioengine D1, FiiO A1