You still get tearing with VSync off even using an FPS limiter. It will certainly reduce GPU usage though. An FPS limiter should be used whenever VSync is disabled, to prevent excessive frame rates on lower games and menu systems (3000 FPS sitting idle at the menu anyone?).
The alternative is to try an FPS limiter with VSync on... you get a little increase in input response caused by the VSync (at most 16ms at 60Hz), but none extra caused by the rubbish way D3D handles frame buffering, which is what causes most of the input lag attributed to VSync IMHO. Of course, the FPS limit needs to be a little bit below monitor refresh rate for this to work (I use 58 on a 60Hz monitor).
The drawback to this alternative is a slight "skipping" of frames noticed in gameplay caused by the disparity between monitor refresh rate and FPS limited frame rate. IMHO this skipping seems much worse than it should. There must be one or two frames per second that have to be drawn twice for 58FPS to show on a 60Hz monitor, but the hiccups seem worse than an extra 16ms frame. I think that the drivers don't sit well with the way the FPS limiters work, but both the nVidia limiter and Afterburner / RivaTuner methods seem to do this. Try it and see for yourself if this bothers you more than the tearing.
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As an aside, I still can't wait for manufacturers to get their acts together and realise that they really don't need fixed refresh rates and VSync anymore... this is required CRT behaviour... with LCD monitors they could use a dynamic refresh rate limited by the monitor's maximum capability. The new frame is sent to the monitor only when the GPU has drawn it. Call it Frame-Sync (FSync) or GPU-Sync (GSync). Benefits? Small but CONSTANT increase in input lag incurred per frame, no skipping/hiccups caused by badly implemented frame rate limiters, no tearing, no need to have other buffering modes like triple buffering which helps game development, etc. etc.
[Wishful_Thinking] Any manufacturer wanting more information can contact me... I have ideas about how it can be implemented using current graphics card technology and interfaces, just a small (potential) LCD monitor hardware change and GPU driver updates. [/Wishful_Thinking]
Martin
