I've just been evaluating my options in this area, so I can pass on what I learned:
If you can afford it, an ideal today is one of the fairly new Eizo 22" LCD panels that can display the entire Adobe gamut - the CG221 - they are awesome, but so is the price... (a Canon 5D is about 2/3 the price of this monitor!)
Eizo make other LCD panels that are considerably cheaper, but still excellent, and they are designed for colour correct display, which is what we need, right?
Make sure, if you choose an LCD panel, that you get one that's 8bit, or better (there are a few 10bit panels). A 6bit panel will compromise your ability to see correct colours.
The reason your neighbour suggested at least a 20" panel is because almost every panel under 20" is a 1280x1024 panel (15", 17", 19" - all the same resolution). Once you get over 19" you can get higher resolutions: 1680x1050, 1920x1200, 2560x1600 (careful - often requires an expensive video card), and even more (if you have $10k+ to spend, there are some scary options available - 4kx3k, anyone?)
Don't forget, you also have the option of going for multiple monitors - I like this option - I have Adobe Bridge open on one screen, and Photoshop on another. Can also be handy to have the Photoshop palettes on a different screen from the image (more image space!). The second screen does NOT have to be as expensive as the first if it is only holding palettes, etc - can use a comparatively cheap panel as a second screen without compromising on your ability to work.
Oh, and consider buying a screen calibration tool, too - they have become much more affordable in the last coupla years.