Wait until you see Blu-ray on a 100" plus screen. The wife and I rarely go out to the movies anymore because the cinemas here in Calgary suck. My home system (118" Carada BW screen, Panasonic PT-AE2000, Denon AVR-3808CI, and a slew of Axiom's) out performs them all. Xbox 360 also looks amazing.
I second Quebec Acoustics and recommend either the Epson Home Cinema 1080UB or the Panasonic PT-AE2000. The Panasonic has powered zoom and focus plus an amazing colour management system. The Epson has less bells and whistles but better blacks--depending on who you talk to. Canada screens are nice. They're made in the US so not duty on getting into the country. I had a much more expensive Da-Lite and sold it off because it wasn't half the screen the Carada was.
The only draw back of a projector is hours of operation. A good bulb on average lasts only 2000 hours. If you use the projector to watch lost of TV, then you'll spend lots of money on extra bulbs and perhaps a new projector after on a couple years. But if you use it just to watch movies, play a game or two and enjoy a play-off game or two, then a projector is a real treat.
Bottom line: If you have a good room for it, bigger is deffinately better.
