Down with Extended Warranties!
Entended Warranties are basically a new source of income that retail stores have discovered. I don't suggest buying them. Since warranties only cover manufacturer defect, most defects will become evident within the warranty period.
Get an HDTV. That's the only way to go. HD ready is fine (even preferred) if you have digital cable or satellite service.
If you can afford the clams, get a plasma. If you're like me, you balk at spending a couple paychecks on a TV.
That leaves you in the land of DLP rear projection or direct view. The DLPs are very bright, but they still suffer from the angley problems traditional rear projection TVs. There are some very nice direct-view (traditional tube) televisions out there, but they are constrained by size (I have a VERY nice 32" HDTV).
The other, less talked-about option is front-projection. Front projectors offer a very high quality picture, larger than any other TV you'll ever own. However, they lack brightness. In the daytime, they get completely whited out. But if you don't mind having one TV for watching Oprah and dropping the projector only for movies and night TV shows, they're simply no better way to go.
I also suggest spending a LOT of time just standing in stores staring at televisions. Watch them up close, watch them from afar, watch them at different angles. Sometimes the results will surprise you. For example, when I was looking at direct-view TVs a few years ago, Sharp was the first to get tossed off the list, shortly followed by Sony. I would have thought Sony would make it to the final bracket, but when I compared the trinitrons to other monitors, they were just plain awful. The winner was, oddly enough, a Samsung. I didn't even think they made TVs...