I doubt this is the right forum to ask this in, but I believe that this is a quite technical question. In GTA4 there is an option under the screen resolution to chose between various hertz. (e.g. there is a 1280x800 52 HZ and a 1280x800 60 HZ). What is the difference between the two? Does this cap my fps or change my display's hertz?
Hertz, in this case is the number of times your monitor refreshes in one second. The higher the hertz, the better games and video will appear. Think of the old animation trick where you take a pad of paper and draw a picture on every page and flip through it, so it looks like the picture is moving. That pad of paper is your monitor. If you flip through 60 pages of that pad in one second, then you were at 60 hertz.
Hertz is independent of your FPS.
FPS is how many frames is being pushed out by your graphics card. Again, the higher the number, the better your games and video will be. So 120 FPS in a game is great.
Do you see the disconnect here? How can my graphics card push out more than what my monitor can display? Well, unfortunately not every frame your graphics card pushed out will get displayed. So, essentially excessively high FPS is a bit of a waste. However, if you are playing a game and the graphics are so intense, your FPS will begin to drop, if it drops too much, then the game will appear choppy. So thats where the high FPS is good, if it drops from really high to high, the game still appears fluid.
Here is a great article on graphics cards, monitors, and settings and how they interact with each other.
Hertz (Hz) is a measure of frequency in "occurrences per second". In this case, how often your monitor refreshes the image on the screen. 60Hz means the monitor refreshes 60 times per second.
This is important because your eyes have a refresh rate as well - which is approximately 60Hz. So if your eyes and your monitor refresh at the same rate you will see a fairly substantial flicker - which can lead to severe eye strain and related physical suffering.
The farther away from multiples of 60 you can get your monitor refresh rate, the easier it will be on your eyes. If you go much below 60Hz you will see flickering.