Response times are a marketing game lcd manufacturers are playing. There is no defined spec for response time so a manufacturer is free to choose the fastest transition on the set and advertise that as the response time. 12ms grey to grey is not the same as 12ms black to white etc.
There is a very good review of 26" lcd TVs on tomshardware.com that shows response time across a range of transitions. Some sets that advertised 16ms response times had considerably slower response times for more difficult transitions.
Look at a bunch of sets in different price ranges and you will start to notice a difference with things like ghosting, black levels and detail in dark scenes. It may take a few trips to your local retailer, but you will start to have opinions on what you find acceptable and what you don't.
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