I have been doing some research into what would fit my needs, as I am building my home theater and PC setup. I've come up with ways that a consumer that can't afford much after buying a next-gen console, be able to afford a HD solution to at least enjoy the content.
What you need:
PC w/ dvi and vga output in your graphics card, preferrably one that can display 1366x1080
Any LCD monitor capable of 8MS response time (AND NO HIGHER), 16:9 preferrable. I just saw a Viewsonic 20" 4:3 that has all you need (349.99)
DVI to HDMI cable (50.99 for 10ft)
This PC setup right here, is capable of offering you 1080i (except you'll get it progressive since its a monitor ) and 720p resolutions for your Xbox 360 and PS3. For the Xbox 360, just buy the VGA cables and you're good to go. For PS3, you will need a DVI to HDMI cable. Hook it into your HDMI port on the PS3 and you're ready. For the Wii, buy the VGA cables (just like Xbox) and you're ready. For the PS3, you may need to hook your audio into another source which shouldn't be too hard or costly. You can buy cheap cables that convert l/r audio channels to a microphone jack, and hook that into your Line-In input on your PC mobo/sound card.
If you are super cheap, you can use your current CRT monitor as your display, but you need to find out what it's max resolution is. 1280x1080 is preferrable. If you have one of the newer models (such as this one http://www.newegg.com/Product/Product.asp?...82E16824116282) then your luck ass can display 1920x1080 which is 1080p, but you still need a DVI to HDMI 1080p cable and its only for PS3.)
If you want to go the extra mile, you can buy a HDTV tuner for your PC that makes it a cable-like set-top box where you can get SD channels and HDTV programming, and also doubles as a TiVO w/o the need for a TiVO box, nor subscription. Also, if you already have cable tv (digi preferred), plug that in for the full TV experience. You will need a pretty big HD to store these videos so keep that in mind. I've seen tuners like these retail for 99.99 to 149.99.
Next, are the sound inputs. Buy yourself a sound card capable of handling 7.1, with all the latest dolby modes, and speakers to go along with that. PC speakers are known to be much cheaper than standard home theater speakers. Of course, home theater speakers work too. But if you don't have the money for this, buy a good set of headphones, and set your speaker setup in WinXP to 5.1 and in your game, set it to Dolby Prologic II.
This setup will make your LCD monitor a true HDTV without HDTV prices. The best thing about it is, that you are able to customize according to what you need, and you can eventually have a full setup for a lot sooner than you think because of the cheaper costs.