Sound like you have an old EDtv (enhasted definition)... save up get the HDtv 1st then save up for the BluRay.... this black friday you can pick up a new 42" panasonic 1080p plasma for $799 + tax at most B&M stores... 50" one's will be around $1.1-1.2K

All BluRay's player have HDMI, that is the ONLY way to get 1080p... but since it sounds like you have old tv(?), that older version HDMI port may not work anyway new dvd player or Bluray because of HDCP

but it also helps us to know the model # of your tv too find out if it is HDCP or not!!