budget lcd or plasma: 720p good enough?

None of the networks broadcast in 1080P and there are no current plans to do so. 720p/1080i is fine. If you are going to have BlueRay 1080P would be beneficial.

I have a 50" 720p DLP display as a main TV, and a HT with 720p front projector on a 10 ft screen (see my system page). It's more than just "decent" IMO and I'm very happy with the resolution (even with the 10 ft dedicated theater), though maybe if I had spent any time with 1080p my expectations would be higher.

The pixel count is the most important. Not all TV's cover the full 1920 x 1080 which you need for full BD quality.

Plasma is way better than LCD ( I have both )

You seem to say this a lot when looking for equipment

budget is super tight....

Here is a video that might explain things for you :

http://www.youtube.com/watch?v=Z-JXfyvlPh0

720p is just as good as 1080p for 50" and smaller. I can quote numerous reviews and expert opinions that all support this. I just bought a 50" plasma 720p from Sears for $900 (minus 10% if you buy on line with their credit card and have it delivered to the store=$810!). Panasonic Viera TH-50PX80U. Fabulous picture on HD material and excellent on SD DVD depending on the quality of the film.