I picked up the 42LP-1D from Home Theater Store two weeks ago. I also recently picked up a Philips 7320 37" LCD. Overall, the Philips has a slightly better picture (after numerous AVIA and DVE sessions with both sets), but both are pretty livable. The Philips just seems to have a little more punch to the image on DVD and has about the best SD picture I've seen from a flat panel set. The LG has a superb picture with OTA HD, has a great DVD picture, but looks a little softer than the Philips with SD. Some of the difference in SD is probably attributable to the larger panel on the LG set. Black levels are a skosh better on the Philips but both sets are acceptable once adjusted using the menu controls.
Feature-wise, the LG has TV guide and a 15-pin RGB input in addition to the HDMI input. The TV guide is a nice feature. The Philips is pretty basic, simple menus and no frills, but it works, and it has two HDMI inputs.
Styling-wise, the LG is a work of art and looks great above the fireplace. The Philips looks nice, but the silver plastic around the speakers and gray plastic on the back looks a little cheesy. The LG looks and feels high dollar (which it is) and the Philips looks mass-market (which it is).
I like both sets - the LG is big enough to enjoy from the kitchen (looking across the family room) and the Philips is perfect in the bedroom. As with most consumer electronics purchases, it comes down to which one you prefer in terms of features, price, picture, and sound. I don't think anyone would be going wrong with either one.
Cheers,
Mike