The standard frame rate for film is 24 frames per second (FPS). This means that if you go to the movies, your eyes are shown 24 frames of film each second.
Many current and older televisions have a fixed refresh rate of 60Hz. This means that if you are watching such a TV, your eyes are shown the digital equivalent of 60 frames each second. Always.
When you are watching a film on a 60Hz television, software in the TV or DVD player detects the incoming signal and fills in the missing 36 frames by repeating frames that your eye has already seen.
Ideally, each frame would be repeated the same number of times. The problem is that 24 doesn't divide evenly into 60. If each frame is repeated twice, that's only 48 frames per second. There will still be 12 missing frames. That's where the 3:2 ratio comes in. To ensure that there will consistently be 60 frames per second, the first frame is displayed on the TV screen 3 times and the second frame is displayed 2 times. The following frame is repeated 3 times, the next one 2 times, etc. throughout the film.
Because alternating frames are not repeated in a consistent manner, however, the picture on the television screen is actually a little jittery. In TV-vendor lingo, this is called judder. Most of us don't notice judder because a second goes by very quickly and our brains adjust to it.
Vendors who are producing televisions for 3-D viewing, need to alternate frames in a consistent manner to get the best possible picture. One way for them to do this is increase the refresh rate on newer LCD televisions to 120Hz. Because 24 divides evenly into 120, alternating frames can be repeated in a consistent manner (5 times each). This consistency produces a more accurate picture.
See also: soap opera effect, Fast Guide to Flant Panel TV
Learn more about 3:2 pulldown:
ProjectorPeople.com explains more about Cinema Pulldown and reverse 3:2 pulldown.