In addition, the source DVD is a factor too. If you take a flick that was a crappy transfer to DVD, flaws may not show up on the stock 27" TV, but probably will on a 52" DLP TV, and definately will on a much larger front projection. It isn't the display, but is the input media. Now, if you take a well done transfer to DVD (or real HD signal), it will look great. Nothing like the real large screen.
I can put in a thumbs up for a good HTPC. I got to experience a home built (as opposed to the store bought Windows Media Edition PCs) HTPC a few weeks back, and it was pretty impressive. Some day, I may go that route, but for now, I have other projects I need to spend money on.
Oh, I have a Sanyo Z3 (last year's model) and a nice Carada screen and I love it.
