In short, better signal leading to better picture.
If you use VGA to TFT, the picture from your graphics card has to go from digital to analogue (VGA) then converted back to digital when it goes to the TFT. The conversions lead to a loss in signal quality.
DVI to TFT avoids this as it's all digital, no conversion so no quality loss.
The actual quality loss thing, I don't know how noticible it is as all the computers I have built with a TFT use DVI.