The absolutely most cost effective way to dive into HDTV is to get either an HDTV tuner card for your computer for $300-400 or get an open box (demo or returned) HDTV set top box from Best Buy or Circuit City for anywhere between $150 and perhaps $350 or $400. You can then use the VGA output from a receiver like the RCA DTC-100 or the Dish 6000 to connect to a <$400 21" or 19" computer monitor. You'll have to use the vertical size control to squish the picture down for proper geometry on a 16:9 image, but you should have an excellent picture on the cheap. A decent quality computer monitor will look as good or better than most CRT rear projection televisions. For local over the air HDTV reception, get a Radioshack double bowtie on closeout for ~$5 or you can get the Zenith Silver Sensor from Circuit City for $30. If you want a good low cost outdoor antenna, try the Channelmaster 4221 for about $25. Lowe's is supposed to have Channelmaster antennae and you may be able to find them at Home Depot. Not sure about Home Depot.
The gear that I mention above is about the cheapest way to get into HDTV. It will also give you a decent idea of what HDTV looks like and what kind of reception you're likely to get at your location. If pleased with watching HDTV on your computer monitor, you may wish to purchase a decent sized HDTV. There are a ton of threads on this forum about 16:9 versus 4:3. Do a search if you want lots
of opinions on the subject. Personally, I think it is better to have your highest quality image (HDTV and DVD) take up the largest amount of your viewing area. Since these high quality sources are 16:9 anyway, I'd recommend going with a 16:9 TV. If you think you will spend more than 50% of your time watching legacy 4:3 cable channels, you may want to go with a 4:3 HDTV. Just be aware that most folks who buy an HDTV find themselves watching a lot more HD programming than they may have originally planned on.
Your budget, decor, spousal approval and lighting control will determine which type of HDTV is right for you. Unfortunately, there is a big difference between 16:9 and 4:3 direct view (glass tube) TVs. The RCA 38" direct view TV is a steal at closeout prices of $1200-$1400. It also includes a built in RCA HDTV receiver. Other than that model, most of the Sony and Toshiba 34" 16:9 HDTVs are horrifically overpriced. You can get a 50" or larger rear projection HDTV for the price of a direct view 34" Sony or Toshiba. Not a good value unless space is really at a premium in your home.
Hmm, where to get the best deal on that new HDTV? If you don't know a lot about HDTV and you want a place that will do a competent installation of all your gear, your best bet would be to go to Bjorn's. If you know what you want (or are willing to spend a little time learning about it) you could try traditional brick and mortar retailers like Best Buy, Circuit City, Conn's or Sears. Finally, if you want a very good price and are willing to buy off the internet, some of the best web-based retailers include amazon.com and oncall.com . I managed to buy a Toshiba 57H82 from Amazon for $2100 delivered. Not too shabby, since Best Buy wants $2500 plus tax and delivery for the exact same model. Look around and you can find a good deal. Just make sure that any internet retailer you consider is reliable. Places like Crazy Eddies don't quite have a spotless reputation. Look around on places like AVS Forum and www.***************.com
and you'll do all right.
Best of luck with your new purchase!