SpeedyDevil, you certainly can. I have a brother who's been doing just that for over two years, and I plan on doing it when I get a new TV. You'll want to make sure that the TV has the resolution and connections that you desire. A digital connection is best (DVI or HDMI), VGA is next best, and anything else is worse in terms of the resolutions and quality of the image. You'll also want to check if the TV does any overscanning on the input that you want to use (overscanning is where the TV will cut off the top few and bottom few pixels) - this shouldn't be an issue for DVI, HDMI, or VGA inputs - and some TVs let you turn off overscanning.
Something to consider is the size of the pixels from your viewing area. My brother has a 37" 1080P widescreen LCD TV, and reading text from 10 feet away can be a little difficult. Luckily, his Mac can zoom in pretty easily.
Midcow2, I think that you might be thinking about an LCD projection TV - LCD backlighting lasts a while.