This is from a older post I made:
Here is what you need to under stand V-Sync...
The FPS (frames per second) is how often your PC produces a unique image or "frame". Normal values range from 25-120+. The FPS drops if your PC is struggling to perform.
The refresh rate is how often your monitor can revise and/or change the image it displays. Normal values are from 60hz upwards. It is a fixed value unless you change it. Not every refresh is unique from the last.
V-Sync synchronises the frames per second (FPS) with the monitor's refresh rate.
When V-Sync is off you might have two frames occasionally happen inside of one monitor refresh. Basically you skip a small section the odd frame. The higher the FPS and the lower the refresh rate the more this will happen. If it happens too much it can lead to graphical errors. For example at 60hz and 130fps you may experience double lines or other errors.
When V-Sync is on the PC will make sure that this never happens by correcting the timing so that only one frame can happen in the time of one screen refresh.
This means that in theory at a refresh rate of 85hz the frame rate can also not go above 85fps.
Do I need V-Sync?
Older CTR monitors usually benefit from V-Sync because they have low refresh rates.
Newer CTR monitors with high refresh rates may need V-Sync depending on the game.
Non-CTR monitors (Any kind of flat screen) are unlikely to benefit at all from v-sync because they do not usually vertically refresh the screen. (I'm not sure about all modern monitors).
If you don't think you need V-Sync then don't use it. It has disadvantages. It can slow down you FPS, it uses a little CPU and some claim that it causes the brain to have a slightly harder time accepting that individual frames are all part of the same picture.
Because the effects of V-sync is most noticeable at low FPS so it might help boost the visible frames in time compression in SHIII especially if you are using a CTR monitor and not a flat screen. However, using the latest drivers will often help a lot more than V-Sync. Try turning it off again and see how it is. You can always turn it back on!
I only know the basics about this, so dont sue me if im wrong on any points!
