Hi Worfzara,
There is an excellent review on affordable front projectors from Sound & Vision at
http://www.soundandvisionmag.com/article.asp?section_id=3&article_id=1408 You should get used to the 16 x 9 ratio; this is the shape of things to come (HD). Once you will have a large screen (100 or 120 inches across) these bars will not annoy you anymore. You will definitely love the theatre effect which they create.
For screen material, there are good offerings from
http://www.carada.com/ and I recently read a very good review on an inexpensive one at
http://www.hometheatersound.com/equipment/grandview_signature.htmYou will live a very exciting project experience; good luck !
JC
Axiom Resident Expert