Do buy Sony. I have a 40” XBR1 (1080i)in the bedroom and a 46” XBR3 (1080p) for the home theater. Stunning picture on both. No problems what so ever.
Amazingly enough I have the exact same TVs in the exact same locations and probably like you, wish the 40” was the newer XBR3.
For the original poster, I would also highly suggest buying Sony for the quality. You can get the 40” Bravia XBR3 HDTV LCD which is 1080p for around $2200. The nice thing about 40” over 46” (if quality is more important than size) is that you get the same 2 million pixels (1920x1080) as the 46” TV, but in a 40” package. The picture appears to be clearer than reality itself.
The only complaint I have with Sony is their linear switching through eight different video connections. If you’re viewing on Video2 and want to switch to Video1, you have to click through the seven connections between them. Other than that, I’ve had no problems what-so-ever. Not even a single stuck pixels to date.
You don’t have to switch through the inputs. Just hit menu, go to external inputs and pick the input you want.
I have a Sony 40" KDL 2500 1080p LCD in the and a 46" Sony Bravia LCD in the living room and I am able to lock out the unused videos so it will scroll only the active ones.
Both have been excellent and have made me very happy.