The TV centric part of my brain won the debate, so I now own a shiny new TV that fixes a lot of the problems we had earlier. Our old TV really was very small. The HD tuner cleans up the signal coming through our "bunny ears" antenna so well. The new TV has an energy saving mode where it can be dimmed slightly and you save on electricity. If you watch most of your TV at night like I do, then this is perfect, during the day you may want to use it on standard so it can compete with natural light. As an LCD it doesn't generate as much heat as plasmas do and is cheaper to run (Oh yes, I did my research. This is one reason I went with LCD). I can now see DVDs a lot better. The PS2 can be plugged in permanently. No more having to swap between PS2 and DVD cables and less mess now that everything has it's place. The screen has a matt finish so reflection is reduced. The sound is in stereo. It's very nice.
Having said all this, I'm suffering from consumer guilt. I really don't like the idea of spending largish amounts of money on something like this, even though I really did get it at the cheapest possible price. I look at this way though: It did fix a lot of problems and I won't be needing to buy a TV for a very, very, very... very long time.