Plasma is better for 50" and up.
LCD is better for 46" and down.
Plasma produces quite a lot of heat, and as a result, doesn't tend to last as long. It's not a very smart technology, uses a lotta power, and is also damaged pretty easily (such as mounting it at an angle). Taking that into consideration, plasma will produce a better picture. Better black levels, better colour reproduction, usually better motion etc...
LCD, however, produces next to no heat, and will last much longer. It's also much more compact, and a good display can be squeezed into a relatively small place, although when manufacturers tend to do this, you seriously compromise the technology behind the TV, such as the tuner, AV switching board, any decoders which may be in there and the sound (remember, smaller and flatter TVs means smaller and flatter sound usually).
LCD doesn't produce a picture as good as plasma can, the black levels tend to be quite poor.
It's up to you. I personally thing Samsung make the best LCD TVs out there, but I'm not entirely sure on the best Plasmas, although we're talking about 'normal' prices here. You can spend say, £8k on a 40" LCD and get a better picture than you've ever seen on a CRT...
EDIT: forgot to say, I wouldn't be too bothered about 1080. IMO, 720p is stunning on a good set, and 1080, even 1080p doesn't make much difference...