I bought this to replace a year-old Samsung 40inch LM87 which itself was a very good TV. After ordering it, I did get a slight case of nerves when I read about some users encountering a problem with so called back-light bleed (uneven patches of light behind the screen when viewing dark screens), but I can see no evidence of this on my set.
Compared to the Samsung, the Sony displays a noticeably better picture on HD (both Sky HD and Blu-Ray). Colour reproduction and handling of motion are significantly better, even to the extent that my girlfriend, who always claims that she can't see the difference between such things, has had to admit that the picture is better. The Samsung was great with HD sources, but images did sometimes suffer ghosting and motion blur. The Sony has none of this and is visibly sharper.
Standard definition Sky broadcasts look great, but as with all TVs they are limited by the quality of the source material.
I can't vouch for the sound because I run my equipment through an AV receiver.
Other plus points are the good quality and easy to use remote and the intuitive and easy to follow cross bar menu (similar to the PS3's).
Overall this is a really excellent TV.
A tip to anyone considering buying this or any other good quality HD TV: Most of the time the factory settings for the TV are way out. Spend some time trying out the settings to get the best picture. For example, the Sony comes with the back-light set quite high - you get a much better picture with it turned down to a lower setting. Also, don't assume that turning on all of the picture enhancements (this TV has several) results in a better picture. Often, particularly with HD material, you will get a more natural picture with them turned off - less is more in other words. The good news is that it's easy to set different preferences for your sources - for example I have different settings for Standard definition TV, Xbox 360 and Blu-Ray/Sky HD.