Good monitors support 8 bits/color output. Average ones only support 6 bits. Bad ones only support 6 bits, and don't do dithering. And there's a whole lot of bad ones out there. Surprisingly, you can even find them in Macs, which makes Apple's excessive use of gradient effects in OSX's UI look really crappy.
You can tell if you have a bad screen just by pulling down a menu, and look at the gradient shadow effect on the edge. You will see horrible banding. If you look at the screen from an angle, it's even more obvious (vertically usually works better). On an "average" display, you can see the dithering effect if you really look, but it isn't nearly so bad.