I know this is a bit of an unfair comparison but i just have a few questions tha i simply cannot answer, my dad has a beovision 7 40" which i recently hooked up my ps3 via dvi to play hd games, i was simply blown away by how good the games looked, take into account that the beovision only supports upto 1080i, i was playing a game that was running at 720p and it was incredibly smooth, the attention to detail was amazing, after that experience i decided that i had to purchase a hd tv, after some reserach i made the decision to purchase the kd40w2000 which can handle resoulution of 1080p. Now i cant help but notice when i play the same game on my sony, if doese not look as good as the beovision, sure it does look good but its no way as smooth and sharp, i have tweaked the settings after much research on this site but still it does not look the same, also what i cant figure is that for some reason the icons are actually displayed smaller on the beovision which to me would indicate that its runner at a higher resolution than the sony Any ideas??

I am afraid it shows numbers are not everything. No idea about the icon size which I agree sounds odd, but the Video Processor will simply be better on the Beovision - probably costs a lot more as well! The Beovisions do seem very good at movement though the resolution will probably be better on the Sony in a static picture. Would be interested what it was like on the BV4-65"

The BeoVisions are the best picture on the market! Shame you didn't get a chance to see the new BeoVision 8, similar picture quality to the BeoVision 7 (better in some respects), fantastic sound and design, and at a price which competes with higher end Sonys!

depends what you watch on it

Does it have an inbuilt amplifier en dvd-player as well?

If not, you can't really compare the price....

since you can buy a perfectly good dvd player from the likes of toshiba for £100 and and amp from say , rotel or sony for less than £400 , even adding those into the equation and the 7 looks ridiculously expensive

The problem of picture quality you mention has little to do with the electronic (the common issues with electronics and full-HD signals are mainly video noise, color calibration...)
The issue of EVERY 1080p LCD panel actually on the market is their very slow response time, which is comparable to 720p panels 3 to 4 years ago, and this issue is VERY visible with HD games, which moves very quickly, and so the slow response time makes the moving picture look less sharp than with a recent 720p panel. 

If B&O release a bv7-40 with a 1080p panel now, it will be affected by the same problem, I'm afraid. Maybe this will be solved in the next generation of panel.