vsync requires 3 buffers to work correctly(without hic-ups), so it will use up slightly more video memory.
Here's how a standard double buffered(no vsync) renderer works.
Videocard front end continuously streams Buffer 1 to your monitor. Your GPU is cranking away to render the next frame to Buffer 2. The frame finishes, now Buffer 1 and 2 are swapped. This swapping more than likely happens mid-frame and you see tearing.
In this case, the GPU is running full power to try to render to Buffer 2.
Typical Tripple buffering (vsync on). Buffer 1 is ALWAYS in sync with your monitor and constantly streams data. Buffer 2 is not in sync with anything is an updated whenever the GPU is done rendering the current frame. Buffer 3 is actively rendered to from the GPU
So, the GPU renders FULL SPEED to buffer 3, once the GPU is done with the current frame, it swaps Buffer 3 and buffer 2 and starts immediately on the next frame.
Buffer 1 may still be streaming to the monitor, so buffer 1 and 2 don't swap. Now, it just so happens that the GPU finishes yet ANOTHER frame and again swaps buffer 2 and 3. So, the previous frame got rendered but never displayed.
Now, the monitor is re-syncing and swaps buffer 1 and 2 and now you get to see the next frame.
Notice that in both v-sync on and off, the GPU is going full out.
With v-sync, if your FPS is under your refresh rate, then you will see every frame rendered. If you produce more FPS than your refresh, some frame will just be dropped and replaced with new data.
edit:
I can sense sub 50fps but only in games where I can move with the mouse, like FPS games.
If I suddenly swing the camera 180 degrees and I'm getting 30FPS, I will notice gaps between objects on the screen. Any time there is fast motion going on, gaps between updates of the objects on the screen is noticeable.
You can think of the Frame Rate as a strobe light. If something is moving fast enough with a slow strobe, you will see jumping. I start to notice this jumping around 50FPS but only for faster moving games. Games like WoW/StarCraft/Diablo I'm typically fine down to 30FPS, but even then certain special effects may seem a bit choppy.
I usually don't have problems until I'm under 40FPS. Around 40fps the choppiness can get bad enough that a rocket in close quarters chops too much to estimate it's relative speed and it's harder to predict it's impact. So, instead of a fast object moving towards you, it looks more like a rocket teleport jumping towards you at an average speed, but it's hard to figure out the speed. Like someone throwing a base ball at you with a strobe running, you'll probably miss the ball.