We have just upgraded to LCD and have all of our equipment in a video/audio closet in the basement.

We used a 4x4 HDMI ethernet matrix switch and connected all the HDTV upstairs by running a pair of CAT 6 ethernet cables. In the basement we used HDMI cables since it was about 35 feet away. This matrix allowed us to run a hybrid system using HDMI or ethernet cables.
The picture quality is perfect and the great thing is that the IR can be transmitted from the upstairs to the equipment over the same ethernet cables!