Is there a point where the human eye cannot "see" or take advantage of
the (scanline rate x higher resolutions) offered by HDTV? Another way
of saying it...we cannot see the full spectrum of light or hear the
higher frequencies that dogs hear. Stereos are sold with super
specifications, offering frequencies and performance that we
physically can't hear. Are we being fooled by a bright large screen
and specs outside of our seeing abilities? I've been told a high-end
TV still out performs these large screen LCD and Plasma Displays. Is
all the hype simply for a large flat screen taking up less space?

Most people don't have perfect hearing, but most have near perfect corrected vision.

Possibly, but I don't think we are at that point yet.

It also depends on
1) How big the screen is
2) How close you are sitting
3) How good your eyesight is
4) The resolution of the HDTV itself.  eg. it may be getting a
1920x1080 input but may be only capable of displaying half that.
5) The refresh rate of interlaced HDTV is no better than interlaced
Standard Def. TV (ie. 60i in USA).

re: we cannot see the full spectrum of light

True, but current TV's produce fewer colours than eyes can see.  See also:
http://www.reghardware.co.uk/2006/09/04/tv_breakthrough/
"TV research to double visible colours".  The article also says that
males see fewer colours than females.

re: I've been told a high-end TV still out performs these large screen
LCD and Plasma Displays

It is _possible_ (don't quote me) that a CRT tv could give a better
display in terms of number of colours - though with LCD etc. they're
getting better - and I think the latest HDMI can transmit more
colours.  A CRT may also be better than high def LCD at displaying
Standard Definition TV.

But in terms of pixel relolution (or number of lines, etc.) a high
definition LCD will be better than a standard definition CRT.  A
Standard Definition TV in the USA displays around 480 visible
interlaced lines, whereas a High Definition LCD can display upto 1080
lines (depending on the model).
Also, I think there is also a company selling High Definition CRT TVs.

The quality of an LCD HDTV picture also depends on the refresh rate of
the display (8ms or less is better).  No matter how good the display
is, if the source is poor and over-compressed, it will look worse than
it could be on screen.

Also note that, even if a HDTV TV _could_ display all visible colours
(which it can't), it would be limited to the number of colours that
the camera (eg. video or film, etc.) recorded.  A video camera can't
record all the variations in colour (and variations in brightness) the
eye can see (I think film is better at this).

I work with TV professionally... 

I can say this - the differences between SDTV (PAL or NTSC) and HDTV
resolutions are appreciable to the human eye.

However that will vary depending of the display size. From 20 feet you
are going to have trouble noticing differences between HD and SD video
on a 29" TV.

There are also many different sub-formats within HDTV that produce
quite different results.

The issue with Plasma and LCD displays is that they utilise image
processing hardware that can actually degrade the image quality,
especially in compressed SD video. Watching a DVD on an Plasma display
can often look noticably worse than on a CRT of equal size.

There are many issues involved, but at it's most basic the human eye
still retains the ability to resolve more 'resolution' than HDTV
provides, and appreciate more colour depth than is offered.

For example, when projected on a cinema screen, the difference between
1080HD, 2K and 4K digital video streams can be seen, although may be
unnoticed by most people.

The capabilities of the human eye far exceed the best current HDTV
capabilities, as follows:

1. Contrast ratio = dynamic ratio of light:dark.  Imagine you're
standing on the beach, looking west, with the sun in the western sky. 
The sunlight sparkles off the waves.  Within your field of view is a
tidepool, in the shadows behind a rock.  The contrast range between
brightest highlight details (sparkles) and deepest shadow details (sea
life at bottom of tidepool) is at least 2000:1 and may exceed
10,000:1.

No HDTV medium (CRT, LCD, DLP) can approach this; the best DLP
contrast is perhaps 400:1 using the 16-square checkerboard pattern. 
Contrast claims higer than this are bogus.

2. Maximum brightness.  The HDTV media are not even close to the
brightness looking out my window at my yard in sunlight.  Obviously,
HDTV media would need to be at least 100X brighter to accurately
reproduce sunlight reflecting from ocean waves.

3.  Resolution = number of line-pairs resolvable over the eye's field
of view.  The human eye has a field-of-view equal to 180 degrees
(horizontal).  Resolution is at least 4,000 lines over this field of
view (and 8,000 lines for people with 20:15 vision).  The best HDTV
and HD-DVD delivers a theoretical 1080 lines (vertical) and perhaps
1400 lines horizontal.

BTW, The best available high-resolution, high-contrast media is 70 mm
film.  Sony manufactures a 4096-line high-definition DLP projector for
theater use.