So ive finally decided to take the new tv plunge and just want to make sure i dont get more than i need.

Chris -- you're right: the major difference between less and more expensive is whether the TV has normal HD resolution (720p and 1080i) or those plus 1080p. For television, 1080p is moot: it is broadcast in one of the other two resolutions. The PS3 does produce a 1080p signal (and so do HD-DVD or BluRay players). The question is, will you see any difference between the normal HD resolution and the 1080p resolution?

I spend a fair amount of time attempting to determine this in as scientific a way as I could, in two separate cases at two different "big box" electronics retailers. In neither case was I able to see a difference between a 1080p signal from an HD-DVD player displayed on a 46" TV with 1080p and one set to 720p. I didn't try a game console, but there's no reason to think it would be any different than the movie I tried. In the end, the (very patient) sales person who helped me get this set up said something like "you can't actually see the difference, but it's more something you can feel". The only thing I felt was the $450 price difference between the two :-)

This is what I observed. You might also check out various opinions expressed, for example some of the results on Google for the query "Is 1080p Worth It?".

My vote is "no". :-)