Make sure you have a system with good performance (e.g. no other microstutter weak links).
If you are using Windows 8.1, make sure you install the 1000Hz mouse fix.
First, enable blur reduction strobing, such as LightBoost, ULMB, Turbo240 or BENQ Blur Reduction.
Blur reduction makes microstutters easier to see. Strobing can make things more stuttery, so you need to raise your mouse Hz to compensate. This is where 500Hz vs 1000Hz can become noticed visually by human eye. Such as LightBoost 50% or less, BENQ Z-Series with Persistence set to less than 2.0ms.
Next, find a window that has small text (preferably 6 or 8 point size).
Drag window while trying to read text on it, drag smoothly at a speed that's approximately one screenwidth per second. That's a moderately fast drag. Make sure you have a really smooth mousepad, because you don't want microstutters from a bumpy/dirty mousepad.
1. Set mouse to 125Hz. Drag window left/right while reading text in window at same time.
Fairly smooth at ~1920 pixels/second, but there are 5 stutters per second that jumps several pixels (the beat frequency between 120Hz and 125Hz = 5 microstutters per second)
2. Set mouse to 500Hz. Drag window left/right while reading text in window at same time.
Much smoother at ~1920 pixels/second, but there are rapid faint microstutters per second of ~4 pixel amplitude (1/500th of 1920). This makes it difficult to read tiny text being mouse-dragged, since 6-to-8 point text vibrates too much during dragging.
3. Set mouse to 1000Hz. Drag window left/right while reading text in window at same time.
Even smoother at ~1920 pixels/second. The mouse microstutters are now nearly too faint to be seen, and small text is now readable while the window is being dragged on a good mousepad on a strobed(LightBoosted) 120Hz monitor at a dragspeed of one full screen width per second!
There you go -- human visible 500Hz vs 1000Hz benefits. It also happens when paying attention to fine textures and details during fast movements in games with fast GPU's during framerate-uncapped situations (e.g. 200fps+)
EDIT -- Photographic proof:
