What is your current CRT?
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Does the fact that I'm using an adaptor mean that it's only displaying as good as VGA
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Correct
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Getting a DVI monitor would improve this right?
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From a purely theoretical standpoint yes, however read below for some caveats
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How would my setup right now compare to 6bit and 8bit?
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Your current setup will be better than LCDs in some ways, worse in others.
CRT's have the unique advantage over all TFT LCDs in that they display a true black. When you switch from a CRT to a TFT LCD, you will be annoyed in games for a while because the blacks and dark shades will look really terrible. You get used to it, and if you spend some more time configuring your brightness and contrast correctly in the game settings, then it is bearable. However no TFT LCD will ever have the accurate black levels of your current CRT due to the bleed-through described above. When I first switched, it really bugged me for about a month...but now I don't notice it. Also note that I have an 8-bit panel with the better color fidelity than 6-bits...so it will be even worse if you get a 6-bit panel. Remember, CRT monitors ALWAYS have better color than a TFT LCD panel.
CRTs may not be as accurate colorwise though due to the VGA connection and the way that CRTs work. Note that LCDs using a VGA connector and/or are 6-bit panels are not any better, only 8-bit panels using a DVI connection. From what it sounds like, color accuracy isn't important to you anyways though.
Also, just because a panel is not 8-bit doesn't automatically make it bad for games. I cannot notice
any ghosting on my 8-bit panel, which is the
only advantage that a 6-bit panel has over an 8-bit panel (aside from price). However, this varies from person to person. Since your used to CRTs, what refresh rate do you start to notice flickering at? I would say that if you're fine using 72-75Hz refresh, then you wouldn't notice any ghosting on an 8-bit panel.