Im not sure on the prices in america, but here in the UK you can get decent LCD and plasma for arround £1000 ($2000), this is for a 42" screen.
You will find that plasma is better in any case, especially on screens larger than 32", If they are available there, take a look at the 720p range from Panasonic, the older models can be found very cheaply and the internals are pretty much the same as the newer, more expensive ones (i think theyre called PX60, PX600 for the older ones, 70/700 for the newer ones).

Having said that, the larger you make a 480P image, the more blocky its going to look, but i find wii games look fine on my 42" screen, you do notice the jaggies if you look for them tho.

go lcd for plasmas are evil and can burn in images when u leave to microwave a hotpocket.

Doesn'tthe wii have built in burn-reduction to compensate for this?

This model is around 1700 on amazon right now, with free shipping.

And it just happens to be one of the best sets on the market, and Cnet gave it their highest rating for an lcd. Ever. If this is out of you pricerange, wait until samsungs new 71 and 81 series lcds hit late aug and early september - this set should drop to even lower. But if you have to have one now, and for less than 1500, the Samsung 61 series is the same panel. However, it lacks the glossy screen(which you may prefer), and it has fewer tweaking options.

Screw a TV, get a projector! That's what I did. This one is good AND it's native HD: http://www.projectorpeople.com/projectors/projdtls.asp?itemid=22951&itmname=Mitsubishi+HC1500

Set it up about 12 feet from where you want the image, shoot it at the wall, get the size you want, focus, tape around the edges of the image and paint with a good pure white flat paint (sherwin williams duration or behr ultra pure premium) sanding well after every coat. You'll get a 120" screen, which is 4x the size of a 60" screen for half the price (4x the area because the measurement is diagonal, I did custom home theater installations for a while which is where I learned that).

Don't let people tell you the wii looks like crap on an HDTV. People watch DVDs on HDTVs all the time and they are not only 480p, but compressed also. The wii looks way clearer than a standard DVD because the image is not compressed. You'll see some jaggies, but it's really not bad if you're more than a few feet from the screen. I have a 120" HD screen (that's 8 feet wide) and my Wii looks just fine on it!

Edit: And it's less than $1000!

I have seen and played Wii on a Panasonic Plasma. It looks good.

This is my TV, an LCD: http://www.newegg.com/Product/Product.asp?Item=N82E16889104062&ATT=89-104-062&CMP=OTC-pr1c3grabb3r&cm_mmc=OTC-pr1c3grabb3r-_-LCD+TV-_-Philips-_-89104062

When I got it, it was $1800. Now it's under $1000. It's "only" 37 inches, but Wii games look great on it. It's got a feature called Pixel Plus 2, which does a great job at upscaling SD (normal TV) and ED (DVDs and the Wii) to HD without looking smeary or very jaggy. And I certainly recomend LCD over plasma, due to burn-in issues. And rear-projection viewing angles suck, so I'd stay away from those like the plague.

Are you happy with your current TV?

I ask this because I got a large Plasma screen last year and have felt buyer's remorse ever since. It's my fault,
but your situation doesn't sound entirely different from my own, and $1500 is a lot of money. I feel a lot of people are
breaking thier bank on something they really shouldn't, myself included.

I don't know your situation, perhaps you NEED a new TV because the old one is dying, but if not I feel there's better
ways to spend your money. Either way I'd like to help, though right off the bat you'll be somewhat hard pressed to find a good 42" at the price range, all though it is possible.

I just went to that site...looks interesting....but what's with the 2,000 hr life of the bulb...can u upgrade....how much do replacements cost?

Neither, its a waste of money if your main use will be the wii.