We came to a reward solution. In addition to #1 & #2 doing so much better on their report cards, #3 had also brought home a report card that was even better than his last one. He has consistently brought home report cards that are brag worthy this year.
We decided that #2 & #3 would get new TV's, and the TV that had been in #3's room (a color TV that dates back to the early 80's I believe) would go to #1. He's bummed that he doesn't get a new TV, but is excited nonetheless. I think he's more bummed about the fact that this TV is old enough that no electronic peripherals (PS2, DVD player, Nintendo, et. al) have the capacity to be hooked to it. By his murmurings I suspect he had designs on the PS2 being relocated to his room.
Sorry kiddo, but give us some time and we will try to get you hooked to cable!