Tigerriot, I might have been the person you saw discussing this earlier. Sorry if that's the case
Anyway, as far as I know rectangular pixels don't really create an distortion issue until you get to the point where you're trying to match pixel-for-pixel. For example when a 42" HD plasma (1024x768 or 1024x1024) renders an HD signal it converts the square pixels to rectangles and everything looks fine. It you use a plasma for a computer monitor though you really want the display to have square pixels so small fonts and icons don't get smudged when converted to rectangles. This is more pronounced when display a computer image simply because there is a lont of 1-2 pixel wide lines (characters, window borders, etc).
I'm not aware of any 42" plasmas that have true square pixels and I've heard plenty pf people sing the virtues of 50" plasma because they do have square pixels. Truthfully 50" plasmas are better - they have more pixels, can be more easily used as a computer display, and are (of course) bigger. Unfortunately they are too expensive and too big for some of us. I bought a 42" Panny HD plasma and the non-square pixels don't bother me. I displays HD, SD, and videogames great. I haven't and probably won't hook up a PC to it because I personally have no reason to.
I hope I helped a little.