If I went the TV route I was planning on mounting it flush with the table top (with a sheet of lexan over it ), with another layer of wood that would go over it to set up other games.
Have you had any issues with it being on its back vs upright?
First, no, we have not had any problems with it being on it's back, although you need to make sure that if you do this you get an LCD/LED TV, not a plasma screen -- plasma screens must stay upright to work.
I have plans for a table I'm hoping to have built that would allow the TV to be raised and lowered -- and covered up when it's not in use. I did, however, do a lot of serious thinking about the idea of putting lexan over the screen, and decided against it because of the distortion in position it will create for players sitting in different places around the table.
Think about this: You've got maybe 1/8th of an inch between the screen and the edge of the frame it's in -- then you're probably going to need at least 1/4" lexan to be sturdy enough avoid sagging, etc. That means that you've got almost 1/2" between the bottom of your figures and the things you're looking at on the map.
This ugly drawing -- which is slightly exaggerated for effect -- illustrates the problem. If you have two players sitting on opposite sides of the table, looking down at a 45 degree angle, they're going to see that mini in VERY different places on the map. 45 degrees makes the math super easy --- if the figure is elevated 3/8 of an inch above the screen, it will appear 3/8 away from it's true position to a player viewing it at that angle. But the player on the other side will see it 3/8 of an inch off it's true position in the OTHER direction -- so they'll see it 3/4 of an inch off from where the other player sees it.
So, my dream table is one that lets me raise the TV from below up to flush with the table -- and when the TV is lowered there are leaves that I can drop into place to turn it into a more "normal" table.
GeekChic has a version of this basic idea -- or, they had one at Gencon. The TV rested in a portal-style table, in a rig with some hydraulics that would allow it to be elevated up -- I don't think it came quite up to vertical. I'm not sure what they achieve with that functionality, but with the TV laid flat, the leaves could be laid out on the table to conceal the TV.
Still, they didn't have anything thick enough on top of the TV that would create any distortion.
I might be totally wrong -- and you might find that it works for you, but I seriously encourage you to find a way to experiment with the idea before you invest any serious resources in a plan that includes that sort of cover over the TV.
-rg