i was wondering what really makes a headset better than the next? why are some $20 while others are $120?
i understand quality differences on most other bike parts, but am still baffled regarding headsets.

The big difference that I have seen, and I am coming from the MTB world here, is the seals. The cheaper ones let water and dirt in easily and rust the bearings away quickly, while the more expensive ones seal better. The bearings are a bit better too.

Also warranties. I have a Chris King in my mtb that has a ten year warranty. I doubt I will have to use it. One of my other bikes had a cheap Cane Creek. The thing started to rust after the first storm I was caught in.
As they say, you get what you pay for.

The bearings also make a big difference, there is a wide range of quality bearings out their. Seals like the other said.

Heck if I know. I bought the King. It is nice.

Mainly it is the quality of the seals, the quality of the casing, and the quality of the bearings. The higher the quality, the smoother and longer the whole system will last.

How does FSA compare to King and Cane Creek?

1. King
2. FSA
3. Cane Creek

In my opinion.

I, as well as a couple of my buddies, consider FSA to ''poor man's" Chris King.

I was trying to find bearings for a piece of equipment (not a bike) as the manufacturer was out of stock. Went to a bearing wholesaler and they had that dimension bearing ranging from about five bucks to nearly fourty.
Chris King is the poobah of headsets. I have only seen one damaged ever and the guy pressure washed his bike at the car wash after every ride. The bushings in the fork had eaten thru the stanchions. If you are ever in Raleigh come by and look at them, they are on display.

Look, a road headset is the least of your worries! Any decent headset will last a very long time. I had a Stronglight that had over 40,000 miles on it when I removed it from a wrecked bike I had and it never failed even after taking a blow that bent the fork and head tube and is currently on another bike (but that bike is now is disrepair). My current headset is a Suntour Superbe that is 19 years old and has just over 80,000 miles with never a problem. I personally think Chris King is overpriced. I think any decent headset made by Ritchy Logic, FSA, Cane Creek, Tange, Campy, Shamano, Stronglight (still made?) all around the $50 dollar range should all last far more than 10 years! In all my years of racing and general riding I have never seen a headset fail and only seen one come loose and that includes cheaper $30 dollar ones! Heck, I have some cheapo crappola headsets on kids bikes that have been abused and they still work just fine-granted they don't have more than 2,000 miles-but they have been crashed into anything and everything, left outside during rains or in the yard when sprinklers came on, never been maintained etc.