With front projection, HD will be good...no question about that. With DVD, you have to work harder and make sure you have a GREAT DVD player - because as you blow up a low res picture (DVD), you see more of the flaws.
I would recommend matching a Projector with an HTPC (Home Theater PC) connected through DVI - the best way for a sharpest picture is 1-to-1 pixel matching, where your output from the source(DVD player) matches the native resolution of the projector.... with an HTPC and some DVD players you can do custom resolutions.
If you have a powerful HTPC, you can sample hi-def DVD with WMV-HD... it is dreamy!
