Where to start.... At this moment in time 'LED' simply refers to the backlighting of a monitor. The main advantages of this includes decreased power consumption and allowing the screen to be thinner and lighter which is good if you need to port it about a lot or you want to say "look how thin my monitor is!" to all of your mates. In terms of image quality it makes very little difference, despite what the marketing spiel may want you to think. The black level , for example, is only deeper under the fairly impractical 'dynamic contrast' mode. For all intents and purposes using edge-lit WLED backlighting has very little effect on the black level. The 'temperature' and low-flicker nature of LED backlights can also improve the appearance of whites and light colours - but an overall high luminance CCFL-backlit display can also impress in this regard. The basic advice I would give is that although LED backlighting is desirable, the actual effect on image quality is very minor and you should certainly not add much weight to this 'feature' when deciding on a monitor.
As for 120Hz - unless you are really into competitive FPS gaming or want to use your monitor for stereoscopic 3D (read; 3D Vision) then your money will be better spent elsewhere. And by elsewhere, given your budget, I mean looking at 'superior' panel technologies. If you really want a great gaming monitor with outstanding image quality then I'd take a serious look at the
Dell UltraSharp U2410. It is one of the most responsive 24-inch IPS panels available. But what does IPS mean? I wouldn't get too bogged down with the technology itself (it's still an LCD display technology, just like 'LED' is at the moment) but the screens using 'In-Plane Switching' technology offer you much better colours (more accurate and often standing out better) and superior viewing angles. The Dell U2410 also offers a broad colour gamut which adds an excellent level of extra vibrancy and immersiveness to your gaming experience (if you like this kind of thing). Couple this with the increadible peak white brightness of the screen (makes explosions etc. really catch your eyes) and you have one hell of a gaming monitor. It is a little over your budget at around £460 but there are other 'similar' monitors available from Dell for around the £250 mark.
I understand this is quite a lot to take in and it's all very confusing. If you need anything explained a bit better don't hesitate to ask. I also have an article on my website
here that helps explain the basics of current monitor technologies. It's worth a quick skim through.
