Evidently you've never actually seen someone play a PC Engine before.
It does depend on the set, but without spending a lot (a LOT) of money on exotic line doublers and such you are far better off with a SD set. You can get a wicked-ass 27" Wega from Craigslist for $40 though, so unless you have serious space issues I don't see any point in buying all the gear it takes to get a flat panel to not look like shit.
I recently got this 34" Bravia, including the stand, for less than half the price of an XRGB3:
Bonus: Technically this is an HDTV (goes to 1080i, has HDMI). There aren't many TVs out that there do a good job of both Laserdisc and BluRay. This is one of them.