I've got the Aquos lc32d40u and am really happy with it. It's not the exact same model as the one you're looking at, but I'm sure they're pretty similar technology- and features-wise.
I use mine for OTA HD broadcasts and it looks fantastic. We get a lot of great broadcasts here in the bay area, and they all look (and sound) top-notch. And SD OTA broadcasts are going off the air soon, so that won't matter to you.
The PS2 looks great also, but I run it through my onkyo AVR, so the image gets cleaned up a bit (de-interlaced) before it gets passed on to my display. The only games I play on my PS2 are the Guitar Hero games, though; everything else is through the upscaling power of my PS3.
It's a no-brainer if you're moving from a 19" CRT to a 32" LCD.
PSN & XBL ID: drop me a private message