1 - whats the best way to connect a Desktop PC to a TV? (either plasma or LCD) (size ranging from 40 - 55 inches)
2 - Is connecting a PC to a TV for gaming going to decrease the response time? i.e. would it function as smoothly and quickly as if i had connected it to a Monitor? TVs dont respond, or display graphics, slower than monitors, do they?
2 - Don't know much about Plasma since I'm only looking at buying a LCD HDTV. However, both will have some level of input lag, some more than others. Don't know of any site that comments on HDTVs for gaming.
One thing that I can tell you is if you buy a LCD HDTV, make sure you can set the refresh rate to 60Hz. There are 120Hz and 240Hz LCD monitors out there, but they really operate at 60Hz, and they "improve" video quality buy creating and inserting extra frames; there by increasing input lag when gaming.
I am specifically looking at the 47" LG 47LH90 (advertised as 240Hz, but really 120Hz) and the 46" Samsung 46A950 (120Hz).
Both have localized LED backlighting instead of the typical CCFL backlight (compact cold florescent lights).
Localized backlighting means sections of the backlight can be dimmed or turned off to get true black. However, there are some possible issues like "white bloom" that you need to deal with. No technology is perfect, and this type of tech is also somewhat expensive.
1) HDMI-PC. You will get video and audio. The video can resize for different games instead of being stuck at 1920x1080 always. Not all HDMI outputs are the same. You want something like the NVidia GTX 275 which can connect to your audio card and output. You can also use a stereo receiver.
2) VGA + stereo audio. Many HDTVs have a VGA-PC input. This is generally just as good as DVI or HDMI for quality. Unlike HDMI, audio connection via a normal 3.5mm cable is simple. Simply hook up the two cables.
3) DVI or HDMI. If they aren't "PC" versions then you must choose a VIDEO input which is either 480i, 480p, 720p, 1080i or 1080p. Assuming you choose 1080p then your PC is permanently stuck at 1920x1080 which can create a lot of problems for gaming.
VGA has the main disadvantage of not working with BluRay (though there's a simple workaround to deactivate BluRay copyright or just rip discs to the hard drive). HDMI-PC is the best if you can output audio from Windows and games both without messing around with settings.
I highly recommend getting a SONY LCD HDTV that has HDMI-PC.
Just FYI, while marketing response time on TV panels might say similar numbers to desktop LCD monitors, reality is that usually large panels have slow response time (where the ~5ms is much more optimistic than the 3ms times on a desktop monintor).
IMO, best bet for large panel gaming is Plasma and DLP they usually have TRUE sub 1ms response times better than desktop LCDs and even CRTs, but it still comes down to personal preferences and personal perception as to what will work for you. Many low response time LCD panels might be good for you, but I would say when gaming on a big LCD be sure to see it gaming in person (take a laptop to the store and run a tough hi fps demo).
As already mentioned best connections are HDMI & DVI, but VGA is ok for most things, just depends on what you end up doing that might matter (like playing HDCP protected content as mentioned above).