I personally wouldn't buy LED yet. I believe they're all still first generation (there will be more problems with these just like we had with the LCD's when they first came out) and I've seen numerous LED's at the store that have the color bar scrolling up through the screen.
Go to Walmart and grab the Vizio E420VL 42" 1080p 120Hz LCD for around $600. I picked one up after returning two different tv's (both LG's, one was an LED) and it's a decent tv. PS3 games, BR discs, and HD programming look fantastic. Standard def. channels are ok depending on the channel.