I absolutely agree with the 'HD is worth it' brigade - the HD improvement is obvious to me when there's HD input being put into it. And that's the point, there may be lesser content that needs upscaled often, but you want to get the full effect of 1920x1080 content when its available. At least I do.
And if you can't see an extra million pixels then glasses are probably a better upgrade than a bigger screen.
I went for the Sony Bravia XBR; the Samsung was a close run thing, but at the end of the day the screen was very reflective, and it was a bit more plasticky (more of a heart than head thing aka it's what the wife wanted). They were the two brands I weighed up against though.
As for Chronus's original 800 squid - I do think you get what you pay for too (as has been said above). The processing and upscaling is an important part I think. And I (personally) would never even consider a plasma. The idea of rear projection was somewhere below a plasma for me - I'd have rather bought a CRT.
If you have to economize though, then it's really picking where to compromise. I'd rather go for smaller but better, but that's just me.