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The PS3 is an awesome Blu Ray player. I own tons of movies, and haven't encountered a single skip or error yet. It already outputs 1080p24 and soon will have DTS-MA decoding. Plus you'll find no compatability issues with certain titles that you may on various set top players. Yes it also upscales standard def DVDs as well. The one thing I can't comment on is it's gaming capabilities lol, haven't played one yet.
As for a TV, at 10ft back even a 50in would be no problem. I sit 12ft back from a 147in screen to give perspective.
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