My turn to jump in. I went through the Z3 vs. the Panny 700 a year ago. I went with teh Z3 at the time because it had the throw distance that I needed, and Sirquack liked his Z2. Each year, the LCD quality gets even more and more impressive, and the DLP prices get lower and lower (as Alan mentioned). It is really a tough time to pick a projector these days.
If I had the cash, I would probably, dare I say it, go with a nice DLP. But I am not made of money, and I wanted a great sub-$2000 projector too, so I went with the Z3.
Keep this in mind. Whatver you go with of your choices, it will look awesome compared to a 27" TV (not slamming on anyone here with a 27" TV. I look at a 27" TV most of the time myself.)
The Z3 does a good job of upconverting, but let me tell it to you like this. I have a Panny S97 DVD player that can upconvert my DVDs from 480i to 480p, 720p, or 1080i (to name a few). My Z3 can do even more choices than that, but too maxes out at 1080i. I have things set for 720p and it looks every bit as good as 1080i because of the progressive vs. interlaced, but that is another story... Anyway, if the DVD is a great quality transfer, or even a computer animated movie, I like using HDMI and letting my Panny S97 do the upconvertion. I think that it does a "sharper" quality job. If the movie isn't animated, or is a lesser quality transfer (a little grainy), I let the Z3 do it as it gives it, what Sirquack calls (and I agree with) a more "film-like" look.
I hope that this helps.
(Disclaimer, upconversion does NOT actually increase the image resolution, but interpolates the pixels to "fill in" extra pixels to simulate greater resolution. I like it, but wanted to share this due to other forum members' opinions of upconverting.)
Now for SonicFox's question. I use mine for movies/videos only. I don't have a HDTV signal coming into my house, and regular satellite looks good, but isn't worth the hours off of the bulb's life in my opinion.
