I own both lcd and plasma. While LCD is catching up in the black department and the motion lag, it's just not there yet. But, it depends what you watch. If you don't watch a lot of fast moving action, such as tennis, or other sports, a newer lcd will do just fine. For my main set, I have a 58 inch Panasonic plasma. Pioneer being the best plasmas available, Panasonic is a close second. I have a Sony and Sharp Aquos LCD and they are fine sets. If you play video games, lcd is better as it does not suffer the burn-in effect that can plague plasma from the static lines on games. If your room is bright, with a lot of windows and reflections, most lcd's have matte screens and will be better.
Bottom line, with prices as low as they've ever been, you'll be happy with either. I am an audio-videophile and prefer plasma though.
That said, go for the biggest screen you can manage. Do not think it will overwhelm the room. That's a fallacy. My living room is not that large, measuring 14 feet wide by 24 feet long, and a 50 inch was too small. Thus, I sold it to my sister and got the 58. I would much prefer a 65 at this point.
I had it mounted on the wall, on an expensive mount that telescoped out like two pair of scissors. Also mounted the 58 that way, but when I heard some wall creaking, I took it down rather than one day perhaps watch it fall down.
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