That size range LCD is probably the easiest, best solution.
The past couple of years LCDs have gotten better faster than other technologies, & with the fortunate price drop history.
Any nicely reviewed unit as long as you preferably stick with the name brands such as Sony, Sharp, Panasonic & Samsung. As we see you're a Sony dude, hope you have the budget not to get hung up on a real bargain cheapie off-brand. Outfits like Costco have ridiculously east return policies, but why even consider spending your time trying to exchange in order to finally get a consistent unit.
There have been recent links as to the intricacies of LCD panel grading & the associated price premiums or discounts. Why deal in some 20% cheaper (at wholesale) panel when it has already been established that it has some certain acknowledged percentage of dead pixels, etc. That's an only expect to get what you pay for proposition.
And expect the price trend to continue. My newspaper business section quotes flat panel TV shipments in 2006 @ 44.6 million; 2005 @ 21.2 million. Good news for all of us.
I currently use a Sony KDS 60A2000 as my primary TV (love it). I am looking for a smaller second TV for my extra bedroom. I am thinking along the lines of a 32 to 37 inch LCD. Would like to stay around $1000 but will go up to $1500 if I must to get a decent picture. What would you recommend?