The VGA port is analog and the DVI port is Digital... the digital port gives higher bandwidth thus higher resolutions can be achieved.... You will need a DVI supported monitor to take full advantage of this... You may have got an adapter to convert the DVI port to an analog one..
Well... Not really, I have not tried it with games tho... It will give you better resolutions like High Definition.
It wont help with any lag you get in gaming and unless you have a DVI monitor you wont notice any difference in quality either. you only really reap the benefits if your watchin movies and such anyway