LED is a form of LCD. "Standard" LCDs use fluorescent light sources as the lights, whereas LED LCDs use LED light sources as the lights.
LEDs are popular for a few reasons. One they can improve the image in some aspects, especially the blacks. LED blacks tend to look better than fluorescent LCD blacks, at least on some larger sized screens. Additionally, LEDs are much lighter, so the overall weight of the TV is lighter. Finally, LEDs draw less power, so LED LCDs on the whole will draw less power.
Screen Size does matter. The smaller the set, the less likely you are to notice advantages of LED. Under 40", there will likely not be a huge difference at all really. In the 40" – 50" range there might some difference, depending on your own individual visual sensitivities. Its when you break 50" that the LED advantages should be more noticeable.
Also, not all brands are made equal. So some brands do a better job with their LED sets than others. A Sony fluorescent LCD for example could beat an LG LED (if its one of the basic LED models from LG). So even in larger sizes, LED isn't automatically the right choice.
In the end, make sure you use your eyes, and not just theoretical specs from the Internet. Even if the reviews on the Internet say otherwise, if you see a TV that looks really good to you, and can be had at a good price, then go for it. As long as the complaints against the TV aren't about reliability, then other people's opinions about how your eyes are going to respond to that TV need to be taken with a grain of salt.
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I think LED is better because it looks brighter. The only difference between LED and LCD is the backlight. The only difference the screen size makes is the amount of money left in your pocket.
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