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Vertical Sync prevents "screen tearing"... the phenomenon where your monitor is displaying two (or more) different frames at the same time because the graphics processor is a little behind the action... The down side is that V-Sync forces your monitor to display in fixed increments (I believe it is 30hz), so if things get a little hairy, sometimes it makes your FPS go lower than it would without V-Sync on.
Unless you are incredibly sensitive to video anomolies, I would turn it off if you are not getting the FPS you are looking for...
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