If you're going to buy a large high-quality monitor, and you intend to keep it through a few computer systems, or through a lot of upgrading I would go with a digital monitor as the analog SVGA/XGA port will eventualy fall by the wayside over the next few years.
The analog output from an older video card has to be converted into digital by the flat-panel, so the PC takes digital video data, converts it into an analog signal meant for a CRT monitor, and then the LCD panel has to read the signal, and decide digitaly where to place the pixels.
So you can see how the whole thing is rather Rube-Goldberg, but in practice most people won't notice the difference. However, all-digital video to an LCD is a bit crisper, and the pixels have a better response time, since there's no lag for analog-to-digital conversion.