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The low end LCDs have contrast ratios of 1000 to 1600 to 1. That will not work, even though the pricing for that level 42" is now in the $999 range. You need a contrast ratio of 3000:1 for a good theater experience. Plasma has gotten better, but used to be particularly vulnerable to burn-in and burn out (shorter life than LCD).
There is a new technology with 2X the refresh rate that's hitting the stores that makes an observable difference in quality. Worth looking at. I'm pretty sure it's LCD-only.
Whichever technology you choose -- and the differences are much smaller than they used to be -- make sure you watch some standard-signal TV to be sure you can live with the result. All the in-store displays are HD, but what you're getting from your cable or an antenna can look awful on some current HDTVs.
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