At 32 inches your 480p content will be just fine. Unless you sit a few inches from the screen?
My family has X-box 360, Wii, PS2, Nintendo 64 and Super Nintendo. We were about to purchase a 32" Samsung LCD 720p TV just for gaming. The salesperson told us that the X-box will look great but the other systems will look worse than on our older TV. He told us we could improve the picture a bit with component cables for the Wii and PS2. He suggested we would not be happy with the LCD. This is the first I have heard about this. Now I don't know if we should buy an LCD or regular TV. This tv will not be used in the near future for watching TV shows or DVDs.