1. My P65S2 has the newest firmware upgrade from Panasonic. I also use D-Nice settings for the TV. You need to enter the service menu to do that. The picture settings are important. The set had the proper break-in and burn-in procedure. I have done all that and more and am satisfied with the picture. Since you bought it used, a lot depends on the previous owner.
2.PQ, you are comparing orange and apple. Projection TV vs a direct view plasma. I would say the the plasma is the winner.
3. I would pay the 1250 for a very good set. But that depends on the previous owner. and how he took care of the tv and was he knowledgeable enough to tweak the picture.
Sony XBR75X850D, Onkyo TX-RZ800, Klipsch speakers, SVS subwoofer, Tivo Roamio