The 120Hz option gives you the potential to smooth out blur and judder (jerkiness during camera panning) in motion. Most new sets with the feature allow you to make adjustments for each individually. If you keep the settings low, you will minimize the soap opera effect, which makes motion too smooth for some. If you don't go with a 120Hz set, you will have no option on your 60Hz set to minimize blur or judder.
Since active shudder 3D alternatively blacks out each lens, they created 240Hz sets to allow each eye to effectively receive 120Hz. A 120Hz set will work for 3D, but 240 is reported to be better.
Recently some manufacturers have added backlight scanning to also help reduce motion problems. Their marketing departments have created newer higher numbers to reflect the combination of these features with a generic combined motion response number which can end up as high, I believe, as 960.
