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Clearly you don't get as much impact with HD from the 26V4000 as you do with the bigger 37V4000. But this is only down to the sheer screen sizes involved, not inherent problems with the 26V4000's HD presentation.
Having said that, the one area where I feel that the 26V4000 isn't as accomplished as its larger sibling is motion handling. There definitely appears to be more evidence of resolution loss where motion is concerned. This is especially true with standard definition sources, but it definitely affects HD to a minor extent too.
The 26V4000's inability to handle 1080p/24 possibly causes a minor issue with judder, too, when watching Blu-rays. And finally in the negative column, areas of very fine detail with HD sources, such as the rigging of the cranes Bond runs up during the opening Parkour sequence of Casino Royale, can occasionally shimmer for some reason.
But overall it's definitely the positives about the 26V4000's pictures that rule the roost, especially in the context of the generally rather flaky budget 26in market.
Sonically the 26V4000 is slightly less impressive. There's plenty of good stuff to report; high volume levels without distortion, a surprisingly wide soundstage, credible vocals, and even a passable amount of bass - something small TVs traditionally struggle to deliver. The problem is that trebles can sound a touch dominant in the mix, occasionally bringing to the fore what should be merely background soundstage elements, and occasionally sounding slightly harsh.
Although the presence of a touch more motion blur stops the 26V4000 being quite as desirable as its larger 37in sibling, its still easily one of the finest 26in TVs I've seen - and surprisingly affordable too.