I'd almost say get a cheap 42" LCD HDTV for that budget. If you could get a 1080P set for that much, I would jump on it. Games look incredible on a big screen, trust me. I use a 46" Sharp Aquos @ 1080P. It blows away my 1920x1200 Dell 2405FPW in terms of detail, color saturation, contrast, response time, and most definately black level.
In fact, I'm pretty sure you can get a 32" 1080P Sharp Aquos for around $500. I've heard they're quite good. You can probably tell I'm partial to Sharp at this point. My 2405 uses a Samsung panel and I've been blown away by how nice the Sharp looks in comparison.