Good question, not much is known about the details of how the Oculus Rift works at the moment, but its 3D effect will probably work like a 3D monitor. Each side will display a different frame, so in terms of both eyes, you'll be seeing half of the total amount of frames being processed by the GPU. So when the GPU is running at 120 FPS, you'll be seeing 60 FPS, and when the GPU is running at 60 FPS, you'll be seeing 30 FPS.
What did you mean by a display that shows 120 FPS? The Rift is the display, you shouldn't need a secondary display.