SMB in 1080i on a 55" screen? Unthinkable for me. Bigger is not always better. I think for NES games a 25" is biggest I can comfortably play on.
I always go with the native resolution of whatever game I am playing and play it on hardware that is as close to an arcade monitor as possible. That is the sharpest and clearest image.
For me the order of preference is:
1. An Arcade monitor the same size as the original dedicated cab. Preferably the OEM hardware or at least a monitor with identical dot pitch and tube curvature.
2. A native res capable PC or Studio monitor the same size as the monitor in the dedicated cab. Think Sony PVM series and their equivalents here.
3. An arcade monitor that is a different size from the original.
4. A studio monitor that is 15khz capable and of a different size than the original.
5. A CRT television, BUT it must be set up very carefully or it falls to the bottom of this list.
6. A CRT PC monitor
7. An LCD TV or monitor
8. A plasma TV
9. A projector
10. DLP TV
11. Rear Projection TV
#7 through 11 are completely unacceptable if they have even the slightest hint of input delay.
Keep in mind this list is only in reference to games that run at 15khz. 31khz and above games or widescreen games are a whole other story.
I never ever turn on any kind of smoothing functions in my games like 2xsai or HQ filters. I'm told these can actually look pretty good though at very high resolutions, but since I have the old hardware to display the games in their native res's I haven't bothered with it.
I actually like the razor sharp pixel look. It's how NES games look when they are played on a studio monitor in 256x240 RGB. It's like you're playing MS Paint.
Here's a few good examples of what I'm talking about with the NES:




But I definitely prefer the softer image that a real NES puts out. That's why my NES emulator of choice is Imbnes, a psx nes emulator. I can hook it up to my RCA lyceum tv through composite out and it looks 99% as "good" as a real NES.
I know, I know, I'm kind of a nut about this.