One of my coworkers had ask me about my thought regarding video projector, here is what I came up with:

Getting a projector is only half or 1/3 the cost of your home cinema system. Don’t forget the surround sound system, this will cost a lot too. You may be able to save money by projecting against a white wall. I did this in 2001 and it looked very good (I suggest to create a black boarder around the picture, this gives a good contrast!). However a real screen is good to have too, I use a manual screen in my bed room and I have a automatic screen in my living room. If you get a high end programmable remote you can configure it the turn the projector on, put the screen down, turn the DVD on and turn the surround sound system on and set it to DVD – all with the press of just one button (same goes for turning things off). You will need some cable too, check http://www.monoprice.com/ for a cheaper options. Depending on your setup cable can be expensive too.

Good page to get an idea what projectors are available:
http://www.projectorcentral.com/

My first projector 800×600 (4×3) $2500 10 years ago, ;-), + cheap ~$50 / 5.1 surround sound system and manual ceiling mount screen (~$150): http://www.projectorcentral.com/Philips-cSmart.htm
Pro long lamp life, optical zoom
Con no optical lens shift (only digital), 1000 ANSI lumen

My second projector 1280×720 (16×9) $1000, + mid price ~$600 / 7.1 surround sound system and automatic ceiling mount screen (~$600): http://www.projectorcentral.com/Panasonic-PT-AX200U.htm
Pro optical zoom and lens shift, 2000 ANSI lumen
Con short lamp life
I got the AX200U from http://www.visualapex.com/ and I would buy from them again.

Right now I would look for features in this order:
optical zoom (gives freedom of installation on Y axis, the distance from the projector to the screen)
optical lens shift (gives freedom of installation on Z axis and X axis (ceiling mount or on table and corrects if not exactly center))
3D support
low price
long lamp life