Could someone explain the difference between a frame limiter and V-Sync?

I've noticed that games with V-Sync nearly always become unplayable for me, due to the heavy mouse lag. But if I use MSI Afterburner to limit those very games to 59 FPS, all mouse lag disappears. (Only way I can play Fallout 3).

This also applies to games that use frame limiting instead of V-Sync. A few I can think of right now are Trackmania, WoW and Borderlands 2. Neither of those have mouse lag, while also removing tearing with the capped FPS.

Everything points to frame limiting being superior, so why aren't more games using it?