Really the best place for these answers is AVS forum.

got a Sony 32 inch M series Bravia, it's 720P/1080I. but at that size, you won't notice, it serves my bedroom with 2 HDMI ports (one for PS3 and one goes to my Arcade).

You can probably find one for around 700 bucks if not cheaper.

I would wait until Black Friday because you can a good tv for extremely cheap. 

Why 1080p? Most games are mastered in 720p and upscaled. If it's true 1080p you want, then wait for next gen :)

I got a 42' Vizio 1080p with PIP and PoP for $999. They have some 46' without PIP of PoP for the same price and 42' for $899.

Contrast Ratio and brand is, frankly, more important than 120 Hz between-frame blending, or 10bit/color channel color, or ANYTHING. All that stuff, that the various TV companies charge an arm and a leg for, is *worthless*.  Human beings have enough trouble telling the diff between 30 Hz and 60 Hz... let alone 60 Hz and 120 Hz, especially if they are merely interpolated frames, and there is a LOT of scientific data demonstrating that most humans can see, at most, 6 bits red, 7 bits green, and 5 bits blue.  let alone 8-8-8, or the ridiculous 10-10-10 you pay $100s extra for.

That said... Sony Bravias are the best. There is no question, in my mind. However, the "under $1000" only fits the 32" and 37" Bravia LCDs, I think, as far as 1080p goes.

You can score some good Samsung and good Philips 40"-ish TVs for around $1000 I think. They aren't on par with Sony, but they are pretty good.

To corroborate what other posters have said, unless you're going to use it as a monitor for your computer as well, there's not a reason to get 1080p on a screen smaller than 40", in my opinion.  You have to get too close to tell the difference, and 95% of games are 720p anyway.  The GPUs on the PS3 and 360 aren't fast enough to do 1080p decently for most game genres -- racing and simplistic arcade/downloadable games are about the only exceptions, due to the way those games are generally rendered.

If I was in your shoes, I'd score the biggest 720p Bravia I could afford (with my $1000) and fit comfortably in my space.  Sony really does make the best TVs... no question.

^Contrast Ratio no way...contrast ratio is a marketing tool to make it seem like so and so TV is better. Well this Samsung has is 2000 to 1 contrast and the LG here is only 1500 to 1 so you can tell it's significantly better... NO just plain no http://www.hometheatermag.com/advicefromtheexperts/0806specsmythsandlies/
read this site. Contrast Ratio is a lie do not buy into it completely! Sony Bravias? Look at my Newegg links from before they point to Sharp GPU1 series, a HDTV with 1080p with a vyper drive that no one is quite sure what it does. But it is the LCD for gaming at that size and newegg has it under 1000.

I have no idea how LCD TV prices are going to do, because it depends on when OLED starts becoming the standard LCD. I would suggest a Plasma again, because they are cheap. Despite Plasmas having more realistic colors and being better overall they aren't as popular as LCDs. As a result Plasma prices are a lot cheaper than LCD even though they are better. For your under 1000 price you can get a lot bigger plasma tv.

edit: However if you are bent on going LCD than I suggest a Phillips they have TV models that are around 3-4 ms lag. Most tvs are 8 ms most sharp tvs are 6 ms. Phillips are also cheap and good tvs for their price, if you want a TV for gaming make sure you get the least amount of lag possible. The hard part is finding a someone who still carries the model you need.

Large OLEDs aren't going to happen anytime soon -- there are some ugly technical hurdles in making them larger.

Plasmas are power hogs, I thought... I don't think I'd get one of those things, when the LCDs are so good these days.

^That's true...but...but... CONTRAST RATIOS!!! The plasma panasonic 800 dollar hdtv is 1000000:1!!!! That's OVER 9000!!!!!! OVER 9000!!! What Vegeta?

You should definitely look at this TV. It is $1050, but there is no tax and no shipping, and it is 40 inches.

http://www.amazon.com/Samsung-LN40A550-40-Inch-1080p-HDTV/dp/B001418W2C/ref=pd_bbs_sr_4?ie=UTF8&s=electronics&qid=1222217299&sr=8-4