I still game with my ps2 on an old panasonic 27" crt.
I'm sure many people still game with an older TV, but how do the games look being down res'ed to 480i? Would it be better just to wait on the "next gen" consoles until I purchase a new TV?
I used a good 24" SDTV for a few months on my Xbox 360 with s-video. Most of the games looked extremely good and hey, they were still fun. They definitely look superior to PS2.
So yea, it's worth it, as long as you want to play the games. Some games (most famously Dead Rising) are near-unplayable on SDTV, though. It's also conceivable you will be at a disadvantage in online but I am sure a lot of people kicking my butt online are on SDTV.
In my opinion, with the costs of HDTV's dropping all the time if you can afford a 360 or PS3 you might as well get a new TV. If you do some digging you could find a decent quality 32" LCD for around $500.
Go for it, sure the games won't look as good as they have the potential to but they'll still be a step above last-gen and they're no less fun. If anything you'll just appreciate HD more after your time spent playing these games in SD.