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If you are going to be playing movies off your computer they should look fine on the TV (unless the quality of the movie is crap). Granted it wont be near as good as running the dvd or wahtever in a player hooked up the tv. I play movies on my 27" oldschool non-flat/non-plasma TV and movies look great on it from the pc.
Best thing for you to do is just hook it up. If you find you like it, then who cares if its not "awesome" quality. If you dont, well then all you lost was the cost of a cable at most.
I should note that the desktop would look like completely crap b/c of the resolution of the tv vs. the computer, but the movies generally look ok, just play it in "theater mode" or full-screen
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