If you are width constrained IMO you should go with a 1.78:1 screen.
Since you are width constrained a 1.78:1 screen will give you the same size 2.35:1 image as the largest 2.35:1 screen you can fit. It will also give you the largest 1.78:1 image you can get, and also likely the largest 1.33:1 image you can get. Even if you don’t watch HDTV now you may decide to later or like you already mentioned you may want it for movies like Avatar or even the recent Batman movie which switches between ratios.
Whichever ratio you choose you will have bars unless you have a dark room and grey screen. As far as masking, if your projector has auto zoom and other adjustment features then for a 2.35:1 image you only need to mask the top or the bottom of the screen and not both since you can move the image up or down. If you mask the top of the screen it likely won’t affect your speakers and isn’t that hard to build. It’s likely curtains would even work since your speakers aren’t going to be at the top of the screen unless you are using dual over/under center speakers.
Even if you don’t want to deal with masking and unmasking the screen if you get a 1.78:1 you can mask the top down to a 2.35:1 and just leave the masking in place. Then some day if you wish you had gotten the 1.78:1 remove the masking and you have one without the need to buy another screen.
Unless you are height constrained, plan on always using a lens or plan on only watching 2.35:1 or similar ratios and just can’t deal with masking there is no good reason I can think of not to get a 1.78:1 screen.
