realize that over the holidays you may not get an immediate response. have a little patience.
you will not see black bars since 1080p is a supported resolution. if you hooked up a dvd player and used standard definition you may see black bars since this is not output at 1920x1080p but rather a different resolution.
image quality of a 32" monitor and 32" tv at 1080p would be about the same. realize that there are different panel types for monitors and televisions and that color accuracy and other factors may differ depending on the type of panel used.
i would suggest buying a 60hz television since 120hz may introduce perceivable lag due to the tv faking in the extra frames (they still only take a 60hz input). some models of 120hz televisions have a 60hz game mode which should work but i've heard of cases where it does not.
onboard speakers on tvs are likely to be better than those found on monitors. both are not terribly good though.
i'd suggest sony, samsung and lg... in that order.
i personally use a 40" 1080p sony bravia and it works fine.