If you are itching for a new set, then get a 720p set. The first generation 1080p displays really don't accept 1080p as an input on most models. The display always coverts everything to 1080p, but the inputs just aren't designed to accept 1080p as an input. Not sure why manufacturers have gone this route.
The difference between 720p and 1080p will basically not be something you will be able to see from about 10 feet away from a 50" display. The main benefit, that I see, for 1080p really is in the front projector arena, where you get into 100"+ diagonal images and are still sitting 10 feet away.
While the resolution of your display is important, it is just part of what creates the image and the content, color, brightness, and most of all contrast and processing (IMO) make or break an image. Give me a $2,000.00 853x480 (EDTV) with good contrast and processing over a $4,000.00 1365x768 (HDTV) plasma with poor contrast and processing any day of the week. For a 42" set at 12 feet, I would bet that nobody would pick the higher resolution set as actually producing the better image.
