I have also been seriously thinking of doing this.
LCD and DLP are ok, but I keep finding myself liking the look of plasma displays better.
I have finally settled on the newest Panasonic plasma models that are just coming out this month. I'm going to get either the 37" or the 42," both of which are around $2,000. I won't be getting this until around Xmas this year or maybe even after the first of the year, and of course I'll look for the best buy I can get. Speaking of "Best Buy," I avoid that store and Circuit City like the plague, but in this case, I might go with BB since it's close to my home and I can try to talk them down in price a bit.
Here is a link to the latest Panasonic plasmas and some reviews of older models. Note the life-span of the plasma TVs. If some zit-faced saleskid tries to tell you that plasma only lasts 2 or 3 years, tell him he's full of shit. The newest plasma technology has a 60,000 hour lifespan. That's as long if not longer than any TV tube ever made:
http://www.plasmatvbuyingguide.com/plas ... smatv.html
Here's a direct link to the Panasonic TH-37PH9UK that I am most considering:
http://www.plasmatvbuyingguide.com/plas ... ph9uk.html
I'm leaning towards the 37" because of the size of the room, and of course price. Like I said, the 37" and 42" displays are in the $2K range, but the 37" is more like $1800 or so. It will end up being about $400 less expensive than the 42", and the difference is just 5 inches. I figure if I really want to watch Star Wars or Lord of the Rings on a gigantic screen, I can buy a projector from a friend of mine who sells them and hang a sheet up on the wall somewhere, rather than having a gigantic screen overpowering the room all the time.
Anyway, that's my advice. Hope this helps.