yes you can see the blur but you are not seeing over 100Hz your brain is not designed to be able to see that fast. Infact most people cannot fully see anywhere near 100Hz
There is a difference between seeing a blur and actually seeing 120Hz. Its the same with dpi no one can see past 120dpi but you will find many magazines are produced at 300dpi but no one can actually see that (I work in the printing industry in IT)
There are only 1% of people in the world that have pure perfect vision where their brains can get somewhere near seeing past 100Hz and these people are usually fighter pilots.
I have met many gamers who claim they can see 120Hz but when they are properly tested with proper equipment it usually tops out around 85-90Hz and this usually happens with gamers who have been gaming from a very early age.
I myself have been gaming since 1982 and I have been tested and I topped out at 85Hz when I thought I would be able to see past 120Hz.
As I said there is a difference between seeing a blur or a gibber from your graphics card to be able to see a fully textured image being produced at 120Hz.
Wish I had £1 for every time I hear this tosh.
http://www.100fps.com/how_many_frames_can_humans_see.htm