new moniter

If you buy a real nice 24 inch monitor it will probably have a resolution of 1920X1200. If you buy a 32in HDTV it will have a resolution of 1920x1080. That means you will actualy have less useable 'space' on the TV, everything will just be bigger. The other problem with TV's Vs. monitors is that TV's generaly have bigger pixels. This means that, compared to a decent quality monitor, things will not appear as sharp.

Some people enjoy playing from their couch. At the "10 foot" (average industry distance for viewing and interacting with TV's, hence the so called 10 foot interface) distance most of the problems with using TV's will blurr, but then you have to get used to reading chat, interface windows, quest text, etc. at 10' or so away. Other people just like having a bigger monitor regardless of some of the draw backs.

Personally, I would just look into a nice 24 to 27 inch monitor, something like:

http://www.newegg.com/Product/Product.aspx?Item=N82E16824001409

As Legionnaire said above, TVs will usually have a lower resolution than a monitor will so it'll be bigger but you'll notice everything will be less sharp.  I used to game from my couch a long time ago.  Actually spent a year playing WoW on a very large screen.  I now play everything on a simple 22" monitor at a desk because it's so much easier to read text and notice details.

If you upgrade to a larger screen, be prepared to have to reconfigure your gaming interface (text larger, icons bigger) to accomodate the larger pixels and less detail.

Resolution shouldnt be that big of an issue, since im using a monitor with a max resolution of 1680x1050. So anything over that would be an improvement. I think the toughest part will be finding a tv with a low response time.