question for people with HDTV know how

i just recently purchased a PS3 and needless to say it rocks, the only downside is my tv. Im working with a standard 480 res. tv set, and i can safely say its time to upgrade to HD. To be honest i dont really know jack about the whole HD tech stuff, so after a little bit of research i think ive narrowed it down to a TV that i COULD be happy to game with. 

 http://www.circuitcity.com/ssm/Samsung-32-LCD-HDTV-LN-T3242H/sem/rpsm/oid/173636/catOid/-12867/rpem/ccd/productDetail.do

 so.. i guess what im asking is, would this TV be suitable for a kick ass PS3 gaming experience? I know that 1080p is better than 720p (this tv is 720), but ive also read alot of times the difference is questionable, does it really make THAT big of a difference? Also ive heard many horror stories about a problem on HDTVs known as game lag, this tv has a feature called game mode that is "supposed" to correct these problems, does it really work? And also if this TV is not up to par, can anyone recommend a HDTV in the same price range that would be better?

I don't think you will notice a difference in a 32" tv.  From the research I did before purchasing my tv most experts say the difference is noticeable only on 50' or greater screens.  I bought a 46" but I thought better safe than sorry and did the 1080P thing.  Overall I think you have chosen an excellent make and should be happy.  If you want to drive yourself crazy with info overload and probably see a million comments on the specific tv you are looking at take a look at

www.avsforums.com

Hope that helps! :D