1080p an issue for now?

An important question is do you want to buy now, or can you wait a little bit. The two grand spread between the new LCD's and the plasmas will narrow over the coming year. Last year, the 40 plus inch LCD's first appeared; they were premium priced, now they're quite a bit cheaper. This year it's the 50 plus inch LCD's coming out. Next year it will be 60 inches no doubt. If the past year is any indication, I fully expect that a $5500 50 inch LCD will be $1000 less by April. Further drops in price in the new year will depend upon when newer models come out.

I don't think that 1080p by itself is worth an extra two grand for until there is more source material. A year from now maybe with Blu-Ray and HD-DVD coming on stream, but not at this moment.

A 1080p projector, if its a good one like the Sony SXRD, would be an interesting comparison with a 720p direct view if you have 1080p material. But again, there is not a lot of source material. I don't know which would be the better picture, but the projector would still have the deficiencies that projectors have, such as dimness in off-axis viewing. And reliability. If you get an LCD projector, keep in mind that Consumer Reports have been noting a lot of problems with them. They are almost the only electronic product that they recommend purchasing an extended warranty for.

Saving money for the future might be a good idea. We're very close to the market introduction of SED TV's.

"a related question - if plasma has better picture quality than rear projection (to my eyes it does), will that continue to be true if the source is 1080p and the rear projection handles 1080p but the plasma doesn't?"

Yes...unless the "foundation" of rear projection is further developed and upgraded. 1080p will remain 1080p; Plasma will just do a better job of showing it than RP, until RP is upgraded and developed. Meaning, since plasma does a better job at showing the media, be it 720p or 1080p, the plasma will produce a better picture than RP because it can do the job better...until RP is further developed. When this happens, RP can take the place of plasma because the "foundation" is stronger and development has taken place. Its a huge claim to say now, but it can happen; should RP be further developed and upgraded. Its actually taking place now; DLP is incorporated with RP. The more DLP is developed, the better RP gets, and so on.

i've never even heard of a video scaler (i'm mostly an audio guy, totally new to video stuff). what exactly does it do? can you actually 'upscale' a 720p or 480p signal to 1080p? or is for the reverse (i.e. taking a 1080p signal and making it viewable on a monitor with lower resolution by 'downscaling it')?

True 1080P displays can accept a native 1920 x 1080 deinterlaced signal. The only widely available content that is 1920 x 1080 are Hi Def DVDs, which have nothing to do with SACD or DVD-A by analogy, and are here to stay as a resolution. Cable/Sat HD is 1240 x 1080 and so the display will upscale the signal to fit the fixed pixel display- not desirable even with the best quality video scaler.

So the choice on what to buy could be matched to a buyers viewing material-- if Hi Def DVDs are not a part of the current landscape-- perhaps another less expensive resolution display makes more sense. Over the next two years, the 1080Ps will come down in price and maybe there will be more content out there with equipment that even allows us to hear the " lossless" hi def audio on the high def DVDs!

LCD is not as good as plasma becuase contrast ratios are lower; so shadow detail is lost in darker movies and scenes such as " Sin City". This makes an LCD display unacceptable for me on this basis alone. IMMV

Scalers actually take the 480p, 720p, 1080i or whathaveyou signal, processes it (de-interlace for XXXi signals and progressively scans the signal), then outputs it to the specified resolution. You are correct, they upscale the signal.

Check out DVDO.com. They offer scalers in the $1200 to 2K range. I was thinking of the iScale HD+ in particular, which scales up to 1080p. The MSRP from DVDO.com is $1500. Play your cards right and shop around, you probably can find it a little cheaper. Plus they have liturature for scalers in general and how DVDO scalers work too.

The VP20/30/50 are a little more expensive the higher you progress but they also offer 1080p and are better processors. IMO, they have a scaler that might fit your budget and offer the performance you're looking for.