LCD and plasma HDTVs have forever changed the world of home theater for the better. Both have their advantages and both are enjoying lower and lower prices for better and better HDTV sets.
If you have a room with a lot of ambient light that leaks in from windows or other rooms, LCD is likely your best technological choice. If you have a room that can get quite dark (or completely black), plasma HDTVs boast better black levels today, meaning their contrast level is better.
Both plasma and LCD HDTVs are very good today. Consider getting the largest HDTV you can afford and/or squeeze into your viewing space. Also, when getting a 1080p HDTV, you should consider spending a few extra hundred dollars on a Blu-ray player to realize the full potential of your HDTV investment, as most cable and satellite providers do not broadcast in 1080p. Even if you rent one Blu-ray at a time from Netflix, you should watch the most video you can get from your 1080p HDTV investment.