Is there an explanation of whats going on from the software down to the hardware that explains tearing? One would think that the graphics card would just tell the LCD display to change whenever it wants to. Why do LCD displays have refresh rates at all?
Even if there's no electron beam, you're still sending the information to the monitor in the same order, over time. How often you send an entire screen's worth of information is, more or less, the refresh rate.
Consider that LCD pixels take time to change from one value to another. Even if your hardware used a lot of bandwidth to send a very high number of frames to the monitor each second, you'd still have to use pixels which could change fast enough to make that meaningful. So although there is no electron beam, there are practical limits to how fast an LCD can refresh.
And if you tell the video card to change what you're sending halfway through a frame, it will do so. Hence, tearing.
Sometimes your video card is faster at drawing than your monitor can possibly refresh, due to its hardware. It will have drawn out a full frame and then started work on the next frame (filling up the buffer with this new data) but it only gets 25% into it before the monitor comes along and grabs the buffer to draw the screen. The buffer it has grabbed is then a frame some fraction completed, but it renders anyway.
If you're moving really fast the difference between the two frames might be pretty dramatic, which looks like a 'tear'. If you're not whipping around it might not be noticeable at all. Vsync instructs the video card to only send up whole frames to the monitor accessible buffers, so the monitor is never in a position to grab a partially written to frame.
It does this by instructing the video card to only write one frame to the buffer and only to do so after the monitor has grabbed the previous frame. This effectively limits your FPS to your monitor's refresh rate.
On why monitors have refresh rates: It's the hardware involved. High end TVs have very high refresh rates (~500+) but you probably don't want to spend the money on a monitor when you're not even going to be able to tell.