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My .02 cents:

Native contrast levels, color accuracy, and the amount of light the projector throws should be far more important than 720p versus 1080p.

An entry-level LCD 1080p unit can be bested visually by higher-end 720p DLP units that are often priced less to begin with.

At the same screen size and the same seating distance from projectors of the same type (LCD and LCD or DLP and DLP), unless you are right on top of the screen *few* people would be able to distinguish a 1080p image from an 720p one without seeing them both side by side and comparing.

Only by freezing both displays on a single frame and comparing will differences (sometimes) be visible, and then it will greatly depend on the quality of encoding on the BD disc and how the movie was shot to begin with, the condition of the film stock when transferred, and if the film is new or old...where older films tend to show alot of grain in the image, which in turn can destroy detail (which is intended, by the way).

Having said all that....the days of 720p are coming to a close, in another year or two there wont be any new 720p displays being produced. And as such, the price of 1080p displays will again come down. Many of us have chosen to spend a small amount on a good quality DLP 720p projector in the short term, and upgrade to a higher quality 1080p unit somewhere down the line when they become more affordable.

The $2000-and-under LCD 1080p units do not impress me so far visually, and my "buy" point is closer to $1200 anyhow.