The main reason you would want to get LCD over plasma is if you are going to get a PS3, other Blu-Ray, or 2nd gen HD-DVD player. Basically anything with 1080p. While you can get a 1080p plasma you are talking serious $$.
I'd agree with you that
all other things being equal, i.e. same display technology, then 1080p is better than 768p. However, IME, a 1080p LCD, DLP or LCOS set will not look as good displaying 1080p content as a good 768p plasma. That difference in resolution simply cannot be resolved by the human eye at normal viewing distances unless you are going up to 60" or bigger. 1080 source material on a 768 plasma, to my eyes, looks better than any of the other technologies. a 1080p LCD set is still way too digital looking for me, the contrast and black levels aren't nearly as good, you get motion artifacts and LCD loses quality at off angles.
That said, 1080p is worth it. You are physically doubling the resolution of your screen. While nothing is broadcast in 1080p, the set is still upsampling to its native resolution.
for non-1080 material, this can actually be a disadvantage. when a 1080 set scales lower-res material, especially SD, up to the 1080 native resolution, the interpolation algorithms introduce an awful lot of artifacts.
When one of my customers buys a normal plasma, I always tell them to set the output on their cable/sat box to 720p as that is really all the resolution they are going to see. You could run 1080i but then you are dealing with all sorts of deinterlacing issues (that I don't want to go into here). On the other hand, if you have a 1080p set you can feel free to set you box to 1080i. It is much easier for a set to deinterlace from 1080i to 1080p.
certainly a 1080p set can resolve all the information in 1080i or 1080p source material. However, any TV has to first de-interlace a 1080i signal, whether it's displaying 768p or 1080p. so if a 1080p set has a poor de-interlacer in it, you will still get motion artifacts and judder when viewing 1080i source material on it. Sure, a 768p set has the additional step of scaling the de-interlaced 1080i feed to 768p. However, if the set has a good de-interlacer and scaler, this will not be a problem. i have my stb set to output 1080i and have seen next to no issues with motion artifacts.
Now I will readily admit that plasma has a much more vibrant, tube like picture and a faster refresh rate. Also, you will certainly get more screen for your money with plasma. On the other hand, if you are looking for the most future compatable and flexable tv in terms of usage, LCD may be the way to go.
the more vibrant, tube-like plasma picture is what made me trade-in my 1080p sony sxrd for the 768p pioneer and i couldn't be happier. the picture is fundamentally different, but to me it is no contest.
Actaully it has very little to do with viewing conditions and everything to do with the wource material. One of the primary benifits of 1080p TV and source is that, due to HDMI handshaking, the scaller is effectively bypassed. This means that the resulting picture has little to no macroblocking. On a more subjective level, once your eye is trained to see screen door effect, you can see the difference between a 1080p set and a 720p set even at distances greater than 12 feet. The effect is simply a smoother, more coherent picture even if you can not see each pixel. I would like to elaborate further but my store is closing and I have alot of TVs to turn off .
I'm not really sure how hdmi handshaking plays into it. the scaler is bypassed because once the 1080i signal is de-interlaced, you are left with a 1080p signal. however, you can still have jaggies and other motion artifacts on a 1080p set displaying a 1080i feed on fast moving feeds if the de-interlacer isn't as good. i'm not sure what the screen-door effect has to do with things here, that has to do with seeing pixellation in projection sets.