One of the 'hot' (in more ways than one!) topics of the last couple of years in the LCD business has been the question of backlight technology, especially the use of LEDs.

About Display Efficiency

LCDs are basically very inefficient displays. The 'cell' of the LCD doesn't create light, but just filters light from a backlight to create an image, and the efficiency is typically just around 5% or so. 95% of the light coming from the backlight is wasted. That means that backlight design and performance is a critical part of the energy consumption of a TV.
Furthermore, the backlight represents around 40% or so of the cost of the LCD, so the LCD makers care a lot about the cost of that part of the display.
Finally, the challenge for LCD makers in visual quality is to get contrast. Many outside the display industry think that the difficulty in making displays is to generate a bright white, but the reality is that in LCDs and PDPs, the challenge is to make a really dark black. Having a very bright backlight adds to the challenge for LCD makers.
Traditionally, backlights for LCDs have been made using cold cathode fluorescent lamps - very small versions of the kind of lamps used for office lighting. CCFLs have been used because they have been one of the most efficient white light sources. However, they are fundamentally digital devices - they are either on or off so it is relatively difficult to control the level of brightness.

RGB or White?

Just as the world is moving away from traditional lighting sources, the LCD makers have identified LEDs as a potential replacement light source for backlights. Early experiments were with separate red, green and blue (RGB) devices which allow fantastic control of both the overall level of light across the screen and also the colour quality. However, controlling the devices is complicated and expensive and the cost of LEDs is basically proportional to the quantity, so this approach is only still being maintained in very high end sets, such as the top of the range from Sharp.
White LEDs are more economical and can be used in two configurations. In one design, the LEDs are set on the edges of the LCD panel and the light is passed through the LCD using a light guide. This kind of design makes extremely thin TVs possible and is the way that notebook LCDs are made. However, having the LEDs at the edge makes it hard to control the illumination on different parts of the screen.

Direct or Edge Lit?

Direct-lit LED backlights put the LEDs directly behind the LCD. By controlling the brightness of individual LEDs, the backlight can be adjusted so that darker parts of the image have lower illumination and brighter parts have more. The technique is known as 'local dimming'. The technology has a huge advantage in improving contrast and the levels of contrast claimed by set makers at this IFA (from 3,000,000 to 1 to 5,000,000:1) are at the limits of what can be measured. The eye, anyway cannot see much above 100,000:1 at one time, so contrast above that is 'good enough'.
The control of the backlight brightness also makes a big difference to energy saving. While PC users often have displays with large areas of white on the screen, the reality is that the average brightness of video content is between 15% and 30% of maximum, with most movies at the low end. If the brightness of the backlight reflects this lower power, the overall power efficiency can be much higher - a great advantage to everyone.
The lower power reduces costs, makes the engineering of the backlights easier (the LEDs get very hot), reduces customers' power bills and helps the environment. The use of LEDs also means the avoidance of the mercury that is essential to making CCFLs efficient.
the moment, LED-backlit sets cost more than CCFL-based sets, but LEDs are chips and follow Haitz's law (not dissimilar to Moore's Law) and typically double in brightness every 18 months. As a result, LED sets will increasingly become the mainstream of TVs in the next few years.
PDPs don't have the backlights like LCDs, and have the potential to be slim (like edge-lit LED LCD TVs) and have high contrast (like locally dimmed direct-lit TVs) at the same time. But LCD is catching up fast!