Could it be that the card is supposed to be working in DVI mode, and i am using a dongle to convert the signal to VGA?
Yes, that could be the case. For example, I am currently having some issues with my old Planar PX191 when I connected it to my HTPC which has an All-In-Wonder Radeon 9600XT. The 9600XT does not have a DVI-D output so I connected to the Planar using the good 'ol VGA connection.
The 2000:1 contrast ratio is merely a marketing ploy because it is dynamic contrast rather than static contrast. Static contrast is the normal, but it seems that it is slowing being replaced by "dynamic contrast" 'cause they can put a larger number to "wow" consumers.
300 cd/m2 Brightness is typical for inexpensive monitors. Some monitors may be as high as 500, but that is just too bright. Most people lower the default brightness (and contrast) settings anyway.
Lower response times means less chances of seeing ghosting effect (after images). Basically, it represents the amount of time it takes the crystals in the LCD panel to change from one color to another under ideal situations. There is no standand methodology to measure response times. Also, Gray-To-Gray is the current "method" that measures response times, a few years ago the standard was Black-To-Black. Since BTB is always higher (i.e. slower) than GTG response times, it was phased out. Similar to static contrast ratio vs. dynamic contrast ratio; where higher is seen seen as better.
Theoretically speaking, the lower the repsonse time the more frames per second a LCD monitor is capable to display, but that depends on how powerful your graphic card is (or are) and the game settings. A milli-second (ms) is one thousandth of a second. Therefore, a LCD monitors capable of 8ms response time can theoretically display up to 125 frames per second (1/0.008), a LCD monitor with a response time of 2ms is theoretically capable of displaying up to 500 frames per second (1/0.002). Remember, that's theoretical and depends on the video card and game settings.