In anything under 50", 1080p resolution is overkill. However, marketing hype has driven us to the point that everyone thinks they need 1080p for true high-def. The FCC in its infinite wisdom did not create a single standard for high definition, so there are currently 18 different flavors, most being either 720p (1280x720) or 1080i/p (1920x1080) resolutions. Standard Definition is 720x480, so every digital display on the market needs to upconvert the SD signal in order to fill the larger panel. Old school CRT sets did not have this limitation (my first HD set is a 46" Sony RPTV) as the electron gun that creates the image can change its scanning speed to match the incoming signal. The other confusing aspect is frame rate. The old NTSC (analog) standard ran video at 30 frames per second, film is shot at 24fps, and computers default to 60fps. The 120Hz refresh rate was chosen since each of the source frame rates can be divided into it. However, I have heard (do not have experience with) that watching film based sources (read: most movies) at the 120fps mode makes them look more like video than film. If you're ok with how it looks , it definitely can reduce motion smear (a common issue in LCDs).
The primary advantage to Plasma is its black level. The "black" we see on our TVs is not necessarily a true black, and with LCD can be a mottled gray on lower end models. LCD is making strides here, especially with LED backlighting. Check out www. hometheatermag.com as they recently reviewed an LCD with exceptional black level. Plasmas also have a much wider viewing angle, meaning people can sit farther off center before the image quality degrades. The primary advantage to LCD is better tolerance to ambient light. Plasmas usually have a very reflective glass panel across the front, so if there is any sort of light source in a room, there will usually be a strong reflection on a plasma. LCD's have more of a matte finish, so they do better in a brightly lit room, or one with lots of windows.
All TVs should be calibrated, as they are setup to stand out on showroom floors, and most adjustments are set in such a way to make the picture look unnatural.
Hope this helps. I wound up with a 47" Philips LCD in my home, primarily due to the ambient light issue. If I did not have the sliding glass door where it was (i.e., had better control of the light in the room), I would have bought a Panasonic plasma. If I were setting up a theater room now, I would also be looking at the Pioneer KURO models.