Standard definition signals will likely look a bit distorted on HD televisions. Regardless of the size, you'll be viewing 480 lines of resolution (SD) on a high definition panel (720 lines, or 1080 lines, respectively).
The panel will always show the native resolution. So if you're watching:
480 lines to a 720p panel, the upconversion would be less than:
480 lines to a 1080p panel.
So your best bet would be to stay as close to standard definition television as possible. I'd recommend a 720p television if you're going to stay with standard definition; as well, if you do happen to get some over the air channels in HD, you'll be able to take advantage of some of that resolution.
You may still experience some of the distortion in the picture, since watching SD on an HD panel is a lot like zooming in too closely on a picture on a computer. It will fill the screen, but the pixelation may still be evident.
Your best bet in this scenario is to go to a retailer, and ask to see a 720p television and a 1080p television side by side, have them switch the channel to a standard definition channel, and compare them side-by-side.
And 720p resolution units often cost a little less, too.
Let me know if I can answer anything else.
Are certain models better for displaying SD signals? I don't subscribe to any HD channels and we only have a standard DVD player. Would the new 120 hz models make a difference at all for SD channels vs the 60 hz? Also, does the size of the screen play a part in the viewing quality of the SD channel? My reasoning tells me that a larger screen would cause the image to look more distorted because it has to blow it up from a very low quality source.