We ended up getting an Hitachi 42HDS52 plasma. This cost about $300 more than the consumer Panasonic 42" but is an exceptionally attractive unit, has two HDMI inputs and is getting great buzz over at AVS forum and other sites. I can't say whether or not it suffers from any of the problems identified for some of the Panasonic models, but it sure looks like a great buy. It hasn't been delivered yet, so we'll see how things work out, but I feel good about the decision.
Just ordered an Oppo Digital DVD player to replace my aging Onkyo. The idea was to get the benefits of progressive scan, upscaling, and digital video out to the TV (DVI-HDMI). It is absolutely amazing to me what your money buys in digital gear these days. This player cost $200 (!!), uses the Faroudja DCDi, and seems to do just about everything you could want processing-wise. I should be able to stay purely in the digital domain for audio and video from both DVD and STB/DVR for as long as possible (my AV receiver, which handles the audio, is a digital device also). I think this is a key to getting great results from all sources. I'm pretty excited, as you may be able to tell.
Thanks to everyone for their advice and recommendations.