I also play my PS3 on a 42" LCD @ 720p. VERY NICE!!
I have a LG 42" Plasma that now cost less than € 1000. My LG PX4 can only work on 720p or 1080i and the graphics are realy great. By the way...there isn't almost games that use 1080p...only Tekken and few others.
You mean 720p and downscaled 1080i