oh, some good advice here, and some misleading advice as well.
projector central is a good "start". But, some of their views and opinions have been questionable. So like anything on the web, read it with an open mind.
www.avsforum.com is another good spot to read. Out of all the sections on that forum, I liked the under 3500 projector section the most. There is a lot of good people there that ccan help.
Now, personally, I got the infocus 4805. I started late December into looking to make a room dedicated to a front pj. I also work at a university in the tech dept so we do all of the projector work on campus. So, I have had a chance to use quite a few projectors over the years as we go through quite a few of them. But, home theater is a different beats, and there is a lot to take into account that I have learned over the last few months since. I'm still learning.
Support is something you need to take into consideration. Projectors can be reliable, but can also be a nightmare, and getting prompt service done is critical.
Panasonic makes the ae700. I almost bought this. It is an LCD. It's a good 720p pj, but more importantly, it's lens can be used in a wide variety of rooms and is very easy to setup. Because of this, you have more options as to where you can mount it...up close to the screen, far away and so on. But Panasonic Canada is worthless. They are known for their pathetic customer support. they just don't seem to care. And their pricing in canada is nuts. that being said,the ae700 has dropped in price lately, and if you can find one, take a look as it's a highly regarded pj. It has a problem with dust spots though, something you might want to read up on.
The LCD vs DLP debate is way overblown. So is the vertical banding and rainbow debate. I've yet to have anyone in my house that can see rainbow on my 4805. We use mostly all LCD's at work, and vertical banding is also a non issue. These are things that video enthusiast tend to blow out of proportion. It's not that they don't exist, but not to the degree that some make them out to be. Personally, I was used to seeing LCD's. But, when I seen the 4805, the colors were without a doubt much better. Blacks were also clearly better. We have dozens of infocus pj's, and they are reliable, and the service in Canada is great. the infocus screenplay 5000 is also a great LCD pj, with 720p support, and brighter then the ae700. It's often overlooked though for some reason, shame because it is a nice pj for a bit less $$$
Also don't buy a business projector to watch movies. The colors are just horrible in comparison. only reason why you should go with a business one is if your playing games on it that use 4:3, or using a computer through it. Keep in mind all the new consoles will be 16:9 anyways. And most xbox games already support 16:9.
This is a very very lengthy topic, and has no clear answer. You really need to start reading up on stuff. I was overwhelmed with which one to buy and I was used to picking out pj for work.
fyi, I have a 4805, 11x17 room, 110 inch screen. I don't like to use Zoom unless I have to,so the pj is 17' back. Seating is 16' and 12'. But, I am using high gain M2500 screen. The 4805 is bright, actually brighter then the ae700, but at that distance I like to use a high gain screen as I like images have that extra pop. The 4805 isn't technically a HDTV pj, which is why I almost got the AE700/5000 instead, but I plan to upgrade wo 1080i anyways so I saved some money to get some axioms and got the 4805 instead. Surprisingly, the 4805 does an amazing job of scaling down 1080/720 to 480p and I challenge anyone to see a major difference in it compared to a lcd at 720p.
How much light in the room is there? Look at replacement bulb costs. The infocus lasts 3000-4000 hours, and cost about $380 for another bulb.
anyways, I got to go.
