As with anything else, there is a definite trade-off proposition regarding these two choices. You might get lucky and be in a situation where your environment (for instance, high altitude) may make your choice a bit easier. Here are the pros and cons of each:
Plasma Television Advantages
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For Plasma televisions, the advantages over LCD are: Better contrast ratio, better ability to render deep blacks, more color depth, better motion tracking (response time), and more availability in very large screen sizes, defined as screens larger than 50 inches.
Plasma Television Disadvantages
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However, the disadvantages of Plasma include: more susceptible to burn-in (due to technology improvements in the past couple of years, this has improved dramatically but it still exists), more heat generation (they run HOT and can easily overheat a room), requires more power consumption (higher electricity bills), heavier weight, and more delicate to ship, does not perform as well at higher altitudes (I have a friend that can attest to this), and shorter display life span.
Just recently, they are finding ways to reduce the amount of heat generated and reduce the power consumption via re-calibration of the plasma units. Several retailers are sending some of their best representatives to training classes on how to accomplish this. In theory, reducing the heat generated and power consumption will help increase the life span, but this has yet to be determined. I personally haven't been trained on how to do this, but if I were to purchase a plasma, I'd investigate this process.
LCD Television Advantages
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LCD television advantages include no burn-in susceptibility, cooler running, less screen glare, more functional at high altitudes, longer display life and looks better in brightly lit rooms. In fact, if you plan on putting your new television in a room with lots of windows, you'll be better off with LCD unless you want to always keep the curtains closed.
Also, LCD televisions have made great strides with regard to native pixel resolution, with a growing number of sets offering a full 1080p (1920x1080) display capability at affordable price levels in screen sizes ranging from 37-inches and up. The number of Plasmas offering 1080p native pixel resolution are still few and far between and are generally more expensive in comparison to their LCD counterparts.
One factor to consider in favor of LCD over Plasma (at least for the near future) is that if you are planning to purchase a Blu-ray Disc, HD-DVD, or Upscaling DVD Player, LCD may be a more cost-effective option as you can get a 1080p LCD set from 37-to-42-inches at a lower price than and 42-inch size Plasma set that has 1080p resolution.
One other factor to consider is that LCD televisions are typically lighter (when comparing same screen sizes) than their Plasma counterparts, making wall installation easier.
LCD Television Disadvantages
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LCD televisions do have drawbacks in several areas vs. Plasma televisions: Lower contrast ratio, not as good rendering deep blacks, not as good at tracking motion (although this is improving), and not as common in large screen sizes above 42-inches (although the number is growing).
Also, although LCD televisions do not suffer from burn-in susceptibility, it is possible that individual pixels on LCD televisions can burn out, causing small, visible, black or white dots to appear on the screen. Individual pixels cannot be repaired; the whole screen would need to be replaced at that point, if the individual pixel burnout becomes annoying to you. Finally, LCD televisions are more expensive than equivalent-sized Plasmas in the 50+ inch category.
So remember, 20 something inches to 42 inches, LCD is cheaper. Move beyond 50 inches and Plasma becomes cheaper.
The Mercury Issue
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Also, one argument that Plasma Television manufacturers are making about LCD Televisions is that they use mercury as part of the chemical makeup of the florescent lighting used to illuminate the screen surface.
However, this is a red herring with regards to choosing a Plasma Television over an LCD Television. In LCD sets, the amount of Mercury used is not only small, it never comes in contact with the user. Also, keep in mind that most common high-efficiency florescent lamps also use Mercury.
Mercury is one of the Earth's elements; its existence in nature is a part of natural processes and has both beneficial and non-beneficial uses, just as most other elements and chemical compounds. You are probably in more danger eating Fish, which may contain traces of Mercury, a couple of times a week than watching, touching, or using an LCD TV. Also, with the development of LED lighting sources, which is Mercury-free, this issue will resolve itself in the years ahead.
LCD Television and HDTV Reception
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On the HDTV part of the equation, most LCD televisions already have built-in standard TV tuners (HDTV tuners must usually be added externally - but more are showing up as a standard feature), while many Plasmas are just monitors-only and may require both external standard and HDTV tuners to receive television signals (although more are beginning to include either NTSC and/or both HDTV tuners). This is definitely a point to check when making your buying decision as it will affect your budget.
My HDTV
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I own a version of LCoS rear projection -- Sony SXRD. Had I not bought this set, I would've chosen to go with LCD simply because my living room has very large windows and has tons of natural light, which would cause a lot of screen glare on a Plasma. This room also tends to get rather warm, so I wouldn't want a Plasma helping things along.
Sure, you can turn up the A/C (although most homes in Alaska don't have A/C), but then that would result in more electricity to keep the room cooler PLUS the added electricity from the Plasma. This room just isn't conducive to a Plasma.