Refresh rate doesn't improve your fps, but it only increases the maximum amount of fps you can possibly get (unless you have v-sync off).
Well, you're right, and wrong :p
Refresh Rate is the amount of 'refreshes' your monitor makes in a second. Really, your monitor doesn't display infinity frames per second (as nice as that'd be), and are constrained by what is called the 'refresh rate'.
The rate is labeled in 'hertz'. 85 hertz is my refresh rate. This is also the number of frames per second that your monitor is capable of displaying. I have Half-Life therefore set to cap my FPS at 85.
Exceeding the refresh rate (for example, going for the 100 fps) will actually degrade performance. Much like an internet connection being sent more data then it can handle and resulting in Packet Loss, your monitor will show 'tearing'. Tearing is when it displays only part of a frame because it's being sent data faster then it can display it. The easiest way to tell if you're tearing is to look down at a grated floor, and strafe back and forth, walk around, and spin. Grated floors work best since they are parallel lines of contrasting colors.
If the floor appears to fracture, and textures are misaligned for a brief second (that second will be your fps / 60, to be exact...), then you've screwed something up. The higher your FPS to refresh rate difference is, the worse, and more frequent tearing will be. In games where FPS can go higher then 100 (like... all of them besides half-life) you can actually get two or more tear fractures on the screen at once.
Keep your FPS at 60 if you don't know your monitor refresh rate. Once you figure it out, then adjust it up. But it's better to leave it low then to brag you have 100 FPS, while all the geeks and nerds are laughing at how stupid you are :p
For some reason on mine, setting my FPS lower then my refresh rate still gave me some form of tearing. I know not what causes that, but setting it to my refresh rates gives me absolutely no tearing, and fast performance.
A Radeon 9800 128 MB pro helps too.
So if you're exceeding refresh rate, you're a fool.