I have a 48" Mitsubishi HD widescreen and have every console since Super Nintendo hooked up to it. Working in the game industry, you can imagine I play a LOT of games. I have had it for 2 years and as much as I play games, it is still flawless. It's rear projection, but looks fantastic if you use all component video.
A guy here at my work has had his 1 year old Philips plasma tv in for repair twice. He gets what is called "flashing" and "hazing" when he plays video games. Not too sure what causes it, but I have seen it and it's what a projection tv looks like when the resistors are burning out. Not pretty. Said he spoke to the repair contact at Meyer-Emco where he bought it and complained about the tv and the guy told him that plasma tvs have actually gotten a bad rep from many people who use them for video gaming. *shrug*
For video gaming, LCD is the way to go. It never appears to be as clear as a good monitor and generally looks no better than a regular tv, but that's because DVDs and 99% of video games (console) out there still don't render out higher than 480i (Matrix video game is 1080i.... too bad it sucks). With component cables from an XBox, you can at least get 480p (progressive scan) though.
Also, I wouldnt make a "major" purchase on a top of the line tv right now. In a year from now, a whole new line of insane tvs will be appearing on the market since 2006 slates the mandatory crossover to digital broadcasting.I have seen some of the prototype tvs at trade shows and WOW. They will be priced to sell too.
Gary Noonan
'01 S/C VX / '18 Forester XT