TogaAssasin,
the answer to your question is that there is no answer. well actually there is no 1 correct answer. the proper viewing distance for you is dependent on the source material you are watching and is also highly subjective. if you are watching HD material you would be happy sitting much closer than if you were watching analog cable or vhs.
some people prefer to sit further from the same set (vfrjim) than others (ftlee) who feel that sitting that far back prevents the cinematic experience. so it is very subjective.
the best advice anyone can give you is to tell you to measure your viewing distance at home and then to go with a tape measure to your local tv retailer and sit that distance from the tvs you are considering, viewing ALL the various sources you have available to you before making a decision.
considering we are at a point where there are so many different kinds of source material available to us it will ultimately be a tradeoff...can you live with sub-par pq on low res sources to have the ultimate HD viewing experience (buy the larger set), or do you go for the better non HD cable/satellite picture at the expense of the larger, more enthralling HD experience? only you can make that decision!