except for personal preferences is there any 'theory' on optimal distance of watching a lcd flatscreen.

one flatsceen is needed for a distance range of 11,5 ft (3,5mtr) - 13,13 ft (4.mtr) the other for 8,2 ft (2,5mtr) - 10 ft (3,0 mtr).

we really tend to the 7-32 but it is not fully compatible with the playstation 3. the 7-40 is but perhaps it is too big.

any input is appreciated............. 

There are advised viewing distances depending upon the size of screen, but your preferred distance is what matters most. I would recommend trying various positions with both the BV7 32" and BV7 40". You should also remember that the viewing distance can be closer if you are predominantly watching in HD as the picture is much sharper.

I heard somewhere that optimal distance is six time height of tv screen.

General Guide based on research by the BBC.

X10   example 40"  4 meter

X10    example 32"   3.20 meter

It all depends on the resolution you are watching.

Minimum viewing distance for a 40" screen is (distance where the eye can't see a difference/pixel any more):
SD: 3m
HD: 2,5m
Full HD 1,6m