I watched my TNG sets on a Sony 28 inch widescreen CRT, and found the quality to be better than VHS, but not as good as DVDs from film source.
Last year I got a 37 inch HD LCD TV and a Blu-ray home cinema (It cost me under a £1000 for the TV and Blu-ray BTW), and a few months later I started a rewatch of TNG (I'm up to S7 now) and I watched a couple of eps on the HD TV upscaled. I can't watch them that way. The quality is horrendous on a larger screen. I'm still watching them on the CRT, 5.1 audio be damned.
EDIT: I should add that I watch most of my DVDs upscaled onto the HD set now, just to see how many films I'm going to double dip on to upgrade to Blu-ray. It's been 18 months since I went HD, and so far I've only felt the need to upgrade around 20 DVDs to Blu, usually DVDs upscaled are good enough to watch.
"Don't try to live so wise. Don't cry 'cause you're so right.
Don't dry with fakes or fears, 'Cause you will hate yourself in the end."
Anime @ MyReviewer