How does the refresh rate of monitors affects the gameplay , my monitor says 60Hz as optimal have heard that if we keep it at 75Hz the game looks better. is it ?
LCD panels always operate at 60Hz. And 60Hz is 60 refreshes of the display per second, hence 60 FPS (frames per second) ... hence for an LCD point of view, gaming at over 60 fps doesn't make much a difference since the display can't show those additional frames whether you like it or not. As far as CRT's go... yes, they have a higher refresh rate up 75Hz, 85Hz or even 100Hz. The main advantage of a higher refresh rate is to reduce the chance of "flicker" and eye-strain. However, it's difficult to compare CRT to LCD frequencies because LCD's use a backlight that operates usually at 200Hz. What you should be more concerned about is the response time (gray to gray & black to black) when looking at LCD specs, the lower the figure, the better.
I may be wrong but can't the human eye only notice a difference up to 60hz and anything above is wasted?
LCD's and CRT's use different technologies, so refresh rates are a different kettle of fish completely. As for how many FPS/Hz you can perceive, 50Hz is more than enough to look continuous, anything else is a bonus. With an LCD the image it's displaying stays on there until it is given new information, so the refresh rate actually doesn't matter so much - you could set it to the exact frequency where humans won't notice a difference (whatever that happens to be), and we wouldn't care. CRTs, on the other hand, have a picture which fades almost instantaneously, so you need a higher refresh rate to ensure a constant picture. In that case, 75Hz looks much better than 60Hz because there's more image to look at per second.