Generally speaking, DLP's have better contrast and black levels than LCD's and LCD's have better color rendition. The Panasonic you are looking at as well as the Sanyo Z4 supposedly narrow the gap quite a bit. For $2,200 or so you can't go wrong; as long as you have a light controlled room. No PJ looks great with a bunch of ambient light. However, if you have a reasonably dark room, I guarantee your jaw will hit the floor if you get that Panasonic set up on a 106" screen. I have an older X1 and at 13 feet from my screen, puts out an 84" diagonal image. If you check out Panasonics website, they probably have a screen size calculator you can use for their PJ's. If not, go to www.projectorcentral and use theirs. Either way, I am sure you can get to 106" or so with your room dimensions. Why 106? Many dedicated screens are that size so it is one many people shoot for. I would buy screen material and staple it to a wood frame and you'll be out less than $300. You can make your own out of black out cloth or a sheet of Parkland Plastics, but if you are going to spend the money on a PJ, get a good screen.
If a person is really into movies and has a dark enough room, a PJ is a must have. The visual difference between a 50" tv and a 106" projetor is as great as HTIB vs Axioms in my opinion. Also, a projector adds to the ambience since it is, well, a projector.
Try to find someone in your area who has a PJ you can demo. You won't believe how good they look. Here are a few screen shots from my old X1 on my blackout cloth screen.
Good luck.
Greg
