Recommend me a TV!

It's bonus time again and this year I'm thinking of getting a new TV (among other things that I "need").

After splitting from my girlfriend last year, she got the 28" Sony CRT so I've been stuck with 14" viewing since then! I'm thinking of going down the LCD route on the basis my living room is fairly small (5m x 4m -ish) so space saving is essential.

I've got a few concerns about LCD though which maybe someone can answer (I trust the views of people on here more than on AV Forums!):

1) I know off-air reception is worse than with a CRT, but is it really that bad (I use Freeview) ?

2) For most viewing, I will be sat around 3m away from the screen. Will a 32" screen be too big to view in this proximity ?

I don't want to spend more than around £1200 and looking on the AV Forums, the Hitachi 32LD7200 seems to be getting a lot of praise (see HERE ), but I've also seen the KLVL32M1 which looks pretty good.

Not much in the way of requirements, just the best quality screen for my budget. 3 scarts (2 RGB) would be good. Not sure if I really need HDMI future proofing since I don't intend getting $ky.

Cheers.