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I'm currently looking for a 37" - 42" LCD HDTV in the $800.00 ~ $1,200 price range. My goal is to get the best price to performance ratio as I can - or "best bang for the buck" - in that price range. Unfortunately, I know very little about what constitutes good "performance" for an LCD and so I would much appreciate some expert advice.

My primary uses for the T.V. will be for watching HD television - mostly sports - and playing some hi-res videojuegos via my PS3. It's also worth noting that I'd rather spend $1,200 for a 37" 720p TV that clearly has a much better picture than a $800.00 42" 1080p TV. In other words, the quality of the picture (colors, contrast, etc.) and also build quality (or company reliability) are of utmost importance. In a very distant second would be # of video inputs, speaker quality, aesthetics, # and quality of extra features (like pip), etc - although, I must admit that I like the prospects of watching two sports simultaneously Also, I am very patient, so if LCDs happen to be cheaper during certain seasons than others, then I would happily wait it out in order to save a little dough - I would prefer to be watching some HD sports before the new year (09) though
To sum my issue up, I want the best picture for a 37 to 42 inch screen LCD HDTV that $1,200 can buy me within the next year, I pray you please help me out.
Also, I've read time and time again online that unless you're looking at a 50" or wider LCD screen that the difference between a 1080p and 720p image doesn't warrant the extra money spent - as in, you can't really tell much of a difference, if any - is this true? If so, then it makes my decision a little easier...or does it? ...anyway you're help would be much appreciated.

Thanks in advance