There are many different panel technologies used in the production of LCD monitors. They range from budget TN panels to expensive, professional quality S-IPS and S-PVA panels. The average consumer usually has no idea what panel technology is used in their LCD. In fact, many power users are also unaware, simply because the panel type is rarely listed by the manufacturer in the monitor specifications. Many users buy monitors based on price and size. Price should be a factor, but you should still know the advantages and disadvantages of the different LCD panel types and be able to identify them before you decide which LCD to purchase.
IPS Panel Technology
S-IPS/H-IPS (In Plane Switching) panels are generally considered the best overall LCD technology for image quality, color accuracy and viewing angles, but this comes at a price. They are well suited for graphics design and other applications which require accurate and consistent color reproduction. S-IPS panels offer the best viewing angles of any current LCD technology, with wide viewing angles up to 178 degress. The response time of S-IPS is adequate, ranging from 6ms to 16ms with current panels. This is only slightly slower than TN panels. However, gamers should take this into consideration. Fast paced games may suffer from motion blur or ghosting with S-IPS panels that have a response time higher than 8ms. S-IPS panels can be identified buy a slight purple hue on blacks when viewed from a wide angle. There are currently few manufacturers using S-IPS panels in comparison to the other panels types making choices limited and they often carry a premium price tag. H-IPS is a newer variation of S-IPS with a different pixel structure that improves contrast ratios and lowers pixel pitch to provide better picture quality.
Two of the most popular widescreen S-IPS monitors are the NEC 20WMGX2 and Dell 2007WFP. The NEC 20WMGX2 monitor uses an AS-IPS panel (basically a custom S-IPS panel made specifically for NEC), has a 6ms response time, glossy coating and includes a TV tuner and speaker bar. The price of the 20WMGX2 ranges from $500-$600. The Dell 2007WFP is much more affordable at around $350, but you are not guranteed an S-IPS panel and it has less features. Unfortunately Dell uses two panel types in this monitor. S-IPS and S-PVA. It is a completely random process so there is no way to know which panel you will receive. However, due to the much lower price of the 2007WFP many are willing to take the risk for a cheap widescreen S-IPS panel. To find more S-IPS panels see our Comprehensive List of S-IPS Based LCD Monitors.
VA Panel Technology
VA (Vertical Alignment) technology such as S-PVA/MVA are middle of the road LCD panels. They offer better color reproduction and wider viewing angles than TN panels, but have slower response times. They are very similar to S-IPS on paper. They also offer large viewing angles and good color reproduction, though not as good as S-IPS. The response times are generally worse than TN or S-IPS panels and there have been reports of a few panels that suffer from input lag, so VA technology may not be the best choice for fast paced gaming. VA panels have the advantage of higher contrast ratios compared to other panel types, which leads to better black levels. The biggest disadvantage of VA based panels is color shifting. Color shifting is when the image viewed from one angle changes or "shifts" when viewed from a slightly different angle, making various uneven brightness levels across the display. This bothers many users to the point they will not even consider buying a VA based panel, while other users don't notice/aren't bothered by the color shifting. Color shifts also cause a loss of shadow detail in dark scenes when viewed directly from the center. VA panels are much easier to find compared to IPS because so many manufacturers use them. They offer better image quality than TN at lower price than IPS based panels.
TN Panel Technology
TN (Twisted Nematic) panels are the most widely used panel type as they are cheap and offer excellent response times, making them perfect for fast paced gaming. The response times of current TN panels range from 2ms to 5ms. However, color reproduction, viewing angles and contrast ratios of TN panels are the worst of any LCD panel technology. Unlike most 8-bit S-IPS/S-PVA/MVA panels, TN panels are only 6-bit and unable to display the full 16.7 million colors available in 24-bit true color. They can mimick the 16.7 million colors of 8-bit panels using a technique called dithering, but the results are unimpressive. TN panels have become popular with the average user because they are very inexpensive. They are also the only panels currently being used in 22" widescreen monitors, a very popular size. Many of these 22" TN panels are around the same price or cheaper than other 20" monitors with different panel types, so it is easy to see how how they gained popularity. Afterall, the average user buys a monitor based on price and size.
Update: Other panel types are now starting to be used in 22" displays, though the majority are still TN.
Summary of LCD Panel Technology
* S-IPS/H-IPS panels are generally considered the best all around panel type, but they are more expensive and very few are made. High end, expensive.
* S-PVA/MVA panels offer better color reproduction and viewing angles than TN panels, have slightly worse response times than TN or S-IPS, offer the best contrast ratios, may suffer from color shifting or input lag and have higher availability than S-IPS panels. Mid range, fair price.
* TN panels are very cheap and have the fastest response times, but suffer from inferior color reproduction, contrast ratios and viewing angles. Low end, inexpensive.