IPS is a type of LCD panel technology that is more expensive than the extremely common TN panel technology. IPS panels offer better colour accuracy and wider viewing angles than TN panels - however they tend to be worse for pixel response time, so for things like fast-paced games more ghosting may be seen on an IPS compared to a TN.
If you are mainly using photoshop then an IPS panel would be a big bonus as the colour accuracy and wide viewing angles (so when you're looking dead-on at the monitor and move your head a bit, the colours don't shift - unlike on a TN) are very useful for image editing.
The LG IPS235V mentioned by FlyingPig is a very good option for a low-cost IPS panel monitor and should fit within your budget.