Can't help but notice that is being played on a CRT.

CRTs have the best timing when it comes to rhythm games. I've tried LCD and Plasma, but they both have a delay that's annoying as hell.

I have noticed that has changed a lot in the past 5 years especially with the high quality LCD displays and I never heard of problems with plasmas having a delay, only that screen burn in could be a problem with the very early late 1990's and early last decade models being used for video games.
There are reasons why CRTs are now used not very often even in the professional settings and part of that is because the early delay problems with LCDs have greatly been improved except when things like frame interpolation and other extra video processing features are turned on.

*shrugs* my friend has a 37" LCD monitor that's not even 1 year old and still finds it to have a delay when it comes to music-timing games. Only reason why it works is because the game itself has a syncing option specifically for LCD and Plasma. He tried the LCD setting, no change, changed it to plasma setting, much better. But that particular game had that option to sync with those types of TVs. Most music rhythm games (especially the older versions) don't have that option. Plus, monitors these days are wide-screen and again, some versions of these games don't offer wide screen format. Some LCD and Plasma screens can compensate for that, but these newer TVs are trying to do away with that and just stick to wide-screen. While the majority could probably care less, these reasons are why CRT still has a purpose today, and why most of the underground music-rhythm scene still likes to have them.

I will say is that with the 2 high quality modern Sony LCD TVs my parents have that I have used to play games like Rock Band, I have noticed no problems with delay when I make sure extra video processing features are turned off.

Yeah, Rock Band has different timing and was made in these newer times with LCD and Plasma in mind compared to the older games especially from Konami/Bemani like Pop'n, Beatmania, DDR. The older games have strict timing windows, some which you can change the delay in milliseconds, but then the delay of the flashing grade can get annoying when the step chart is moving faster than the (what should be) instantaneous feedback. In casual play, it's tolerable for the most part, but as AboxofDeth said, tournaments, even with that 1 millisecond response time can be all the difference between a perfect grade or something else. And to tell them to "deal with it" will mean fewer participants, so it's really just better to have something reliable like the good ole CRT. Casual play though, it's whatever cause the average Joe that comes to play a couple songs wont even know what's considered good or bad timing.

Also with how you say 0 delay is important, I do wonder what the delay is that is a result of the game having to process the controller command and convert digital to an analog signal for the CRT.

the delay is generally acceptable for general gaming on higher quality LCD TVs, but CRTs have 0 lag. period. The problem is that these games are very specifically based on timing, with windows that are very small. If there's a .1 second delay, that could be the difference between a perfect grade, and only a decent one. For competition levels, perfect calibration is important, and that is the default setting for CRT.

From what I have read, the delay on the great quality LCDs has now gotten down to a few milliseconds when extra video processing stuff is not activated.

And by a few I mean like 2 milliseconds on the very super high end.

At least the buttons are big enough for the paws.

awwzz! ^_^