In the past several weeks I have tried both the Sony 50" and Hitachi 50" LCD projection sets. I used my disk to dial in both sets, and this is what I found:
Both HD-DVD's and HD signals looked very good along with games, but standard DVD's just don't look clean at all. I tried my DVD's through my HD-DVD 360 addon, and my Panasonic up-conversion player. I am giving my 42" HD CRT Mitsubishi projection set to my kids, but last night I connected my Panasonic player to the Mits just to re-fresh myself with the way I remember seeing DVD's on it, and I could not believe it. I sat just 5 feet away watching some Lord Of The Rings, and could not believe how much better standard DVD's looked. HD signals and HD-DVD's look very good also, but gaming does not.

So it's going to be a 50" 1080p DLP or a 50" Plasma for under $2000.00, I am also thinking about just buying the Hitachi 51" CRT HD projection set for $800.00 at the stores. What should I do?

I have the Panasonic 50 inch and it is great. Also can be had in your price range at Best Buy.

That's interesting. I have a Sony 46" LCD rptv and find that non-hd dvds look very good. I'm using the Panasonic upconverting S52S player connected with component cables.

I just returned from my buddies home after setting up his Sony 42" LCD rptv. Initially, his Zenith progressive scan dvd/vcr combo was connected via coax (done by the Comcast installer last week). The PQ was just ok this way. Since the Zenith didn't have an HDMI output and he didn't have component cables, I used S-Video....the PQ was vastly improved to the point where we thought it looked great.

In the end, I don't know why your PQ isn't all that good with your LCD...other than I don't have an HD player to compare. Could be my 62 year old eyes also. :D