I'm not saying your wrong about the lag problem, but I think it must only affect some TVs. As I said earlier, I have an Emerson 22" with 1080i and I don't notice any lag problems on any 720p games. The TV has a "game" mode, but I don't use it because it seems to make the colors dull and crappy looking. So, I'm hoping that the new TV with 1080p that I get won't have the lag problem either. Like I said, I play COD a lot and it's 1080p, so I don't want any downgrade of image quality with a 720p TV.
I noticed that Emerson makes a 26" TV, but it's only 720p. Emerson isn't a great brand, but the TV I have is okay. It just needs to be bigger. I've noticed a lot of 26" TVs are only 720p for some reason, while there are some 22" ones that are in 1080p/i. Makes no sense to me.
I'm really considering getting the Insignia 26" from ebay (the only place that I can find a new one of that kind). The only problem is that the sellers don't offer a return/refund policy. Normally, I wouldn't even consider that, but it says that the ebay buyer protection policy is in place on these, so hopefully, I would get a refund if the TV turns out to be defective.