LED is just the back light. Most TVs currently use a fluorescent back light but LED is becoming more popular. All have an LCD panel. LED back lights use less power but have less of a track record and tend to cost a bit more. In theory, LED back lights should make for a better TV. There is a lot more to consider than just that though. There is a lot of information here already if you check out existing threads and the FAQ section. This thread is a little dated but may be useful: FAQ - Which HDTV Should I Buy?
LED Backlighting will only provide better blacks if the tv has a dimming feature, local dimming with full array led being the best for this. Depending on how good the lcd panel in front of the lighting is, this is what will provide better black levels. Lower models use a cheaper panels so black levels will suffer and vice versa with the more expensive models.
Many sets nowadays use a dynamic dimming feature which will dim or brighten the whole panel according to the content on the screen which can create some level of better blacks. But, the content on the screen suffers in that the whole of the brightness drops which can decrease shadow detail and make the content harder to see, which can be very annoying. My friend just bought a Sharp that has this feature and I found it aggravating to watch as it takes a second or two for the backlight dimming to catch up to the content. So it would be decently bright in one scene and then a dark scene would come up and you could watch it dim and hardly be able to make out what is going on.
Also consider that the viewing angle of these sets can vary greatly. The Bane of most LCD and LED set's existence.
Pansonic and LG use panels that have the widest viewing angles for this technology and are a large step ahead of the Sony ... Samsung ... and Sharp (worst viewing angles). Some sharp units have a viewing angle good for all of two people if they sit really close to each other. IF not ... the colors can change significantly just one person over.
I tend to avoid making blanket statements about brands. That is because many brands vary significantly between models. Sometimes, they also vary within models, depending on the date they were manufactured.
The two items that affect picture quality the most are panel quality and back light quality. Both tend to be good in high end, name brand sets and both pretty much suck in bargain house brand sets. In the mid range, they can vary greatly between brands and models. The best deals are in mid-priced sets that have a good panel and back light combination. I avoid sets that have a lot of 'whiz-bang' features since they are often covering up for cutting corners elsewhere, like the panel and back light. It takes a lot of research to determine panel and back light quality for any particular make, model and year but it usually pays off.
... and Sharp (worst viewing angles). Some sharp units have a viewing angle good for all of two people if they sit really close to each other. IF not ... the colors can change significantly just one person over.
The one thing that hasn't been mentioned is your Blu-ray use. Without getting overly technical, one of the real advantages of BD is the ability to play film content at 24fps (which is the same format as in a theatre). Because 24 doesn't go into 60 evenly, a 60Hz set needs to use an algorithm (3:2 pulldown) to allow 24fps playback. 120/24 = 5, no "dirty frames" required and a better picture.
I agree with the general comment that LED is a better set. Your best bet is a 120Hz LED TV, but if you have to make a trade-off you should consider how much Blu-ray you'll be playing.
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