I have a 40" Samsung LCD in my apartment at college (it's in my BR so max viewing distance is about 8-9' but I game at about 5' and use it as a computer monitor at closer distances. Set is a LN-T4065F. As far as top picks go, at the 40-42" size point w/ 1080p, you are looking at things like: Samsung 61F, 65F, 69F, and 71F series (the latter two are 120hz sets), Sony XBR-4 (120hz), W3000, and V3000 series, Panasonic TH-42PZ700U and TH-42PZ77U plasmas, Sharp 42D64U LCDs, etc...
In all honesty, if you are going to go with plasma, Pioneer is probably the most respected name in the buisness. They currently make pretty much the best HD-TVs going right now. However, the goods come with a price. To be honest, I'm not even sure what their 42" offerings are off the top of my head. Other than them, I would hesitate to recomend a plasma that wasn't made by either Panasonic or Samsung (one of the newer sammy sets). If it doesn't come from Pioneer, Panasonic, or Samsung, I wouldn't personally buy it (in the plasma market). It just seems that all the "other" plasmas are kinda meeh.
The LCD market is a bit different. Sony, Sharp, and Samsung are well respected for making good sets in this market. However, there are plenty of other offerings from companies like JVC (I'm a fan), Philips, Toshiba, etc... Even Vizio sets are pretty nice (and a great bang for the buck in many cases). Almost everyone and their mother has an offering at either 40" or 42" (most of them have many models in both 720p and 1080p). The one thing you aren't going to find at 42: HD RPTVs (either using DLP or other tech). Those sets "generally" start at about 50.
If you aren't going to use the set any closer than 8', you can stick to a 720p set at 42" and not really have to worry about 1080p until you get a hair bigger. However, realize that the industry is pushing 1080p and that to get a better set, you may have to go with 1080p anyway. IE: the newest sets that are rolling out like the sony XBR-4/5 and the Samsung LN-T40671F (and the 69F) only come in 1080p (IE: they aren't really matched by 720p sets that were rolled out with them). Like Yoyo said, resolution isn't the most important thing going. However, many of these newer sets do have all the things that make a set worth watching, and they also have the resolution.
In any case, I didn't see where you said how much you want to spend. If you have a limited budget that is holding you to the 42" ish size limit, perhaps checking out a 50-56" DLP or Sony RP set is in your cards. At 15', a 42" set would be pretty pathetic to watch (nothing more than having a TV on while you were doing something else). However, at 8', a 42" will be fine (so would a 50).