DVI is better than VGA for TFTs because they are digital and VGA is analog. A TFT displayes its picture digitally, pixel per pixel. Via DVI the panel gets data for each pixel, so the picture generated in the graphics card will match exact with the pixels on the panel itself.
Not so with VGA. First, the picture is generated digitally in the graphics card. Then it's converted to analog. In the TFT they will be converted again to digital (=> senseless twice conversion => quality loss), using the phase and the clock, and it'll be calculated which pixel should display what color. As the phase and clock can't be adjusted so precisely that a pixel of a picture generated by the graphics card will be displayed by the appropriate pixel on the panel. Means that the picture will be interpolated a little bit, which again means quality loss.
The electron cannons of the CRT need analog signals, that's why VGA is the best for CRTs and DVI would make no sense here.
For TFTs, DVI is the best. I won't get a TFT with no DVI.
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