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Smoother animation is possible if the program runs slightly faster than the screen refresh. Even though some of those frames get thrown away, there is always a frame ready to draw for each refresh of the monitor. Vertical Sync limits the frame rate to the refresh rate, so if the program has taken longer than (typically) 1/60th of a second to create a frame (due to other programs grabbing the CPU), it will have to skip the current refresh and wait until the next top-of-display signal from the monitor.
The main drawback is for systems (like mine) which can't maintain the same fps as the monitor. At 1920x1400x16, I get about 40 fps. But with Vertical Sync on, I'm limited to every-other-refresh, or 30 fps.
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