PS3 are a lot cheaper these days, plus as far as I can tell, any decent size HDTV is going to cost you a pretty penny. Alternative, you can get LCD computer monitors with HDMI connection and use that. Sure your monitor might not have speakers (HDMI sends both audio and video signals) but if it is anything like my LG 23" monitor, it will have a headphone/speaker output as well.
I mainly use my PS3 on my old 27" TV with the simple analog/composite connections. Haven't used it much with my monitor but I have decent 2.1 speakers that fit into the headphone jack.
