People get a little off track when they start talking about resolution and viewing distance.
If you have a 1080p TV, then the ONLY way that the graph is accurate is if you are viewing a 1080p source. If you ever watch SDTV then you should be at the viewing distance as specified by the graph for SDTV. This is something like 5x the screen width.
For home theater, where the source is going to be limited to HDTV, HD Discs, or high quality DVD discs, then 1.54x screen width is the rule I try to follow. But, for normal viewing, I put people at least 2.5x screen width to about 4x screen width. My 42" plasma in the bedroom I view at about 12 feet, and it works nicely. My 50" plasma in the family room at 12 feet... well, that one seems a little small.