I have a Radeon 5770 so the video card won't be a problem.
I will be using the monitor 90% for gaming and 10% for web browsing.
I will also be viewing the monitor from about 2 feet away.
Will a lot of pixels be seen at this distance?
Is 8ms response good for gaming?
Does 1080p make a difference over 720p at 2 feet?
And finally, will using such a large monitor at a close range possibly give me headaches?
1080p is considered a pretty low resolution for a computer monitor that size - 720p would be near unbearable. 720p is like the resolution of an ultraportable laptop.
Honestly, my opinion is that TV's should be used for TV, and computer monitors should be used for computers. Computer monitors have higher pixel density, and are all around a better choice for general computer use in my opinion. I would personally take a 1920x1080 23 inch computer monitor over a 32 inch 1080p hdtv anyday for computer use.
That's just me though...
(Oh, and just so you know, that TV is definitely 16:9 aspect ratio, not 16:10)
I think you're just looking for a 24" monitor - these will have a higher pixel density than larger screens if the resolution is the same. Also they seem the most (?) popular range today and your viewing distance is pretty normal. Just go for the best model there - you have plenty of options for this size
I suppose you could go with a 27" screen if you really want to - unless you bump into some ergonomic hurdle. Price is a little higher, but mostly it's the smaller selection of models available (in case you're picky in the features your monitor should have).
For gaming just make sure its 120Hz. Most gamers still use CRT because of the refresh rate. I believe the best ratio for gaming is no bigger than 1600x1050 6:1. I've heard a lot people say they dont like gaming on 6:9 or a bigger reso. Also, I've played BC2 and MW2 on my friends 55" Samsung 240Hz TV, and that was just amazing.