If you watch Blu-ray on 22" it almost defeats the purpose... But, you could consider it as "getting ready", not having to make two big purchases at the same time and get the big TV (35" up) later on.
As for LotR, I remember reading that Peter Jackson commented that the extended cuts may in fact be released next year, therefore before The Hobbit. He did bascially finish Lovely Bones and is not quite due yet to work on his Tin Tin film (Spielberg is apparently done filming his, now into the two-year post production...).