HDTV Questions! Come One, Come All!

I am finally on the cusp of finally purchasing an HDTV but some doubts and questions still linger. I current have the following set-up, 27" CRT television that is situated about 8 feet away from the couch. I am thinking about getting a 32" 1080p LCD HDTV. I know there is a formula to determine how big of a set you need depending on the viewing distance but I can not seem to find it anywhere.

Is 32" too big for my set-up? Too small? Also can the human eye distinguish between 720p and 1080p? And finally what is the native resolution for my Xbox 360? Will I see it at full 1080 glory or just 720?

At close viewing distances, yes: http://www.carltonbale.com/2006/11/1080p-does-matter/

I believe the Xbox 360 outputs in 720p and 1080i, but not 1080p.

ETA: Wiki says the Xbox 360 can output in 1080p, so I might be wrong.

According to cnet.com, 8 feet is right at the max for a 32" TV.

Do you have an Xbox 360 Elite? It’s the only one with an HDMI connector, so it’s the only one that supports 1080p. They all support 720p or 1080i however (with the correct cable).

I’m also considering replacing a 27" CRT with a high-def TV, but am wondering if a 1080p set would be overkill. In my experience with LCD computer monitors, the best picture is at the native resolution of the display, so how will a 1080p display look when displaying a 720p signal, from analog television channel or even from a videotape? Would you get a better picture from a 720p set? If I ever get really serious about buying an HDTV, I plan to ask the store to display a lower resolution on some of these sets to see how they look.

1080p is (so I’ve heard) going to be what’s needed for HD DVD to display effectively. You might not care about that now, but since LCD tv’s should last something like 10 years, it’s quite conceivable you would be buying a HD player during the life of the tv. A friend hooked his Xbox360 to my LCD with component cables, and it looked frakking sweet at 1080i

A co-worker of mine just purchased a 720p HDTV, and during his shopping he was looking for 1080p, but the salesman told him to compare the 1080p and the 720p from the distance he would be watching at home, about 12 feet away. He could not see a difference and saved himself about $700 getting the 720p.

You can throw numbers and shit around all day, but if you can’t tell the difference who gives a fuck, right?