I don't have a lot of time to write down a detailed reply but the reason why LCDs are so laggy is because response time claims by manufacturers are basically bull****.
Like with many other claims about monitor specs, there is no clear definition what exactly response is and how it is measured. Only recently have there been some efforts by manufacturers to establish certain standards and quality certifications. Those standards are pushed only by higher end manufacturers to differentiate themselves more clearly from the rest of the market, so you won't see those on most monitors.
Of course manufacturers can't fabricate response time claims. So what happens is they run a series of response time tests and cherry-pick the best result, which ends up on the monitor label. This is of course not representative of normal use, so the "accepted" testing methodology is to run several response time tests and to then take an average, which you will only find in independent reviews/tests.
Additionally, there are two factors that determine the latency (total delay) of an LCD panel:
The (pixel) response time and the signal processing delay. Both terms are pretty self-explanatory. The signal processing delay is the time it takes for the LCD controller board to process the signal and tell the pixels to move. The Pixel response time is the time it takes for the pixels to move.
Almost no manufacturers measure the signal processing delay. I have seen it measured for some very high end monitors, but the information is hard to find. Again to get accurate information, look for independent reviews/tests.
Now what does all of this mean in practice? Although you can't trust manufacturer claims to be accurate, most 5ms response time monitors will still be faster than most 10ms monitors. Among 1ms, 2ms and 5ms monitors it gets tricky and really there's no way to know which is faster in terms of actual latency, unless you find a test online.
You can use any review site that lists these measurements. I personally recommend the websites:
-prad.de (mostly German, some tests are translated into English. Maybe use Google translate)
-Notebookcheck.com ( all reviews in german/English, few monitor reviews)
-some American website, which name I forgot
In practice, all LCD monitors have noticeable lag. I own the Asus VG248QE monitor, which was one of the fastest monitors ever measured by prad.de. I took my monitor over to Kadano's place like a year or two ago to make some measurements and we found that with a lagless wii->HDMI adapter, there was still about half a frame of lag on average, compared to wii+CRT. This half frame of lag was noticeable to a trained eye but very easy to get used to and the setup was very playable despite the slight lag.
Note that with the above setup, we had the wii connected to the monitor directly, so the monitor was displaying at 60hz and not 120 hz or 144hz, which is possible with a PC. Playing on a PC with the FasterMelee dolphin build, we got very good results. FasterMelee reduces lag by about 60ms or so, meaning we were far below console latency, giving us the opportunity to play with other laglessly over quite a far distance. I'd like to also point out that Kadano found that old AMD graphics cards, as well as integrated Intel graphics cause additional input delay, up to 1-2 frames. He only confirmed 900 series NVIDIA cards to be lagless, but there's reason to assume that more modern NVIDIA and AMD Graphics cards would also be lagless.
CRTs are mostly lagless. The 8ms figure you mentioned was probably in reference to the time it takes for a CRT to draw the image, which is of course unavoidable. There are some CRT TVs that lag, for more info see Kadano's "Perfect Setup" thread. (I'm on mobile and too lazy to find the link).
If you want the best netplay setup, look for a used CRT monitor. You can get them for free or like 10-30$. There's more you need to know about CRT monitors so if you're interested, say so in a reply here and I'll link some of my past posts.
