Depends. Are you a tweaker or do you prefer plug-and-play? Do you have very good room light control? How big a screen do you want?
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The lines aren't quite as close a one might believe. 3 gun projectors still rule. However they are costly;and require special set up, sometimes outboard scalers/ doublers.
The one eyed lcds & dlps have there own set of complications. #1 with me is the Sony lcd light bulb/ it is a $500.item. #2 would be black level.
Everything I read about the rear projection 16x9 hdtvs, is their less than stellar performance on ntsc programing.If you watch sports,hbo,etc this becomes an issue for those of us with great older displays.(2/3 year old sets)While they all make your dvds better,that is't enough for me to take the big dollar plunge.--Just yet!
Both have trade offs, so it largely depends on your viewing and listening habits, available space, and lighting control. I went with an earlier Sony LCD 16:9 projector, primarily for movie playback and the occasional playoff game. My room can be darkened during daylight hours which is a big consideration with a front projection system. My viewing room is also my listening room so I didn't want a large RPTV sitting between my speakers. In this price range the RPTV will produce a better picture; sharper, brighter, better black shadow detail, and may be more free of artifacts. On the other hand front projection allows a much larger screen which gives a more cinamatic experience. IMO this makes up for any difference in picture quality. An 80" or larger screen is MUCH larger then your common 55" or 65" RPTV. These are some of the basic considerations.
I have been wrestling with the very same question, researching, auditioning, reading, thinking, comparing, imagining, laughing, crying... Here's what I have concluded:
Projector Pros: You can make the screen size anything you want it to be. It weighs just a few pounds so you can move it around to your heart's content (unless you mount it to the ceiling). If you go DLT, you get a great picture that doesn't require periodic convergence. You can improve the picture with HTPC (expensive right now). 16:9 ("widescreen") is possible with a panamorph lens (expensive right now). "HDTV ready" is not an issue -- it's just a projector, it is ready for anything you throw at it. Plus it can double as a projector for business presentations.
Projector Cons: Has fan noise, about like a slide projector (whoops, I'm showing my age). Depending on the brand, fair to gawd awful in the user-friendly department. A decent number of brands to choose from, but not like RPTV. Needs tweaking -- not for someone who has no patience for reading a manual. Must have a fairly dark room to get best performance. Some people see annoying rainbowing. If you buy it locally it will be expensive but you might (depending on the dealer) get setup and service. If you buy it on the Internet you will save money but get no local help.
RPTV Pros: Plug and play. Silent operation. Many brands and sizes within brands to choose from. Easily auditioned. Locally available, local service. Lots of them out there so you can get very good deals. Status symbol.
RPTV Cons: Huge footprint. One heavy mother. Fixed screen size. Requires periodic convergence. If you choose a 16:9 screen, you're warned that if you watch more than 50% of the time in 4:3 you'll burn in the screen. If you choose a 4:3 screen, you'll never be able to watch movies in widescreen.
I'm sure I've forgotten some issues in the above categories and look forward to any comments.
My conclusion: RPTV is a good choice for a family with lots of kids that is looking for a big screen TV for the rec room. Or for people who don't want to bother with all the foolishness of settings and computer nonsense. But for someone who has the luxury of a dedicated home theatre and is willing to do some moderate tweaking, a projector is the only way to go.
When was the last time you went to the movies and watched a big TV?
Despite the few negatives of a projector, fan noise being the most annoying for me (supposedly a "hush box" can help this), I have concluded that it is the best choice for me. In my opinion, RPTV today is what console TVs were in the 1960s.
I chose the NEC LT150 projector. Current street price is $2343.