Argh not again... I wish manufacturers would stop confusing people - LED and LCD are currently the same thing. "LED" simply refers to the fact that the monitor has a light emitting diode based backlight rather than CCFL lamps.
To keep costs down and to fit the thin aesthetic that people find pleasing these days, LED backlighting is predominantly a case of placing a border of LEDs around the bezel. Compared to CCFL lamps they are considerably more energy efficient and the purity and precision at which they can be controlled can mean give a contrast and perceived luminance (brightness) advantage over CCFL backlit LCDs. The improved efficiency of LED backlights over CCFL lamps, lower heat emissions and mercury-free status are attractive environmental benefits.
An alternative type of LED backlight, which is rarely implemented for the afforementioned reasons, involves the use of coloured (red, green and blue) LEDs to illuminate the screen. Because the intensity of LEDs can be individually controlled (as well as with high precision and evenness), differential contrast can be used across the screen and superior contrast can theoretically be obtained. The use of RGB LEDs also broadens the colour gamut considerably, taking it beyond NTSC (up to about 114% NTSC). There is little point in using RGB backlighting on a TN panel (i.e. the cheaper panels which the vast majority of modern LCDs are), as the broad colour gamut is wasted on the "filter", so to speak.
Unfortunately - you'll find that so far a lot of LED-backlighting solutions have been poorly implemented and the monitors poorly calibrated. What this means is that you can get some some pretty off colours (even for comparable TN panels).
On the flipside, there are certain edge-lit LED screens I have been impressed with (namely the Samsung SM XL2370). The colours were actually exceptional for a TN panel and the contrast was excellent - all in all it had very pleasing image quality. But this screen was also fairly expensive compared to other TN panels (newer 120Hz models notwithstanding) and for that price you could be looking at a nice broad-gamut IPS panel with a nice WCG-CCFL backlight. The most impressive LED panel I have used is probably the Samsung XL20, but this uses RGB backlighting behind the display and is infact an MVA panel.
For a £170 budget and as a gamer - if you don't have a strange requirement for super accurate colours (especially at off-centre viewing angles), I would recommend you consider the BenQ V2400 ECO or G2420HDBL (the main difference being the aesthetics and lack of HDMI on the latter). They both have LED backlights and have received some very positive reviews, not least from happy buyers on Overclockers. For gaming purposes you should find the image very vibrant and pleasing.
