Among the hottest of the new home theater projectors released in this holiday season is the Panasonic PT-L500U, scheduled to commence shipments in the US next week. Panasonic is also marketing the PT-L500U as the PT-AE500U. These products are identical. The difference in style numbers relates only to the type of dealer or retailer that you buy it from. Since most of the Panasonic dealers on ProjectorCentral will be handling the PT-L500U edition, we will henceforth in this review refer to it by that style number, or simply the "L500" for short. But you may find the AE500 version at a local retailer, so bear in mind that all comments herein pertaining to the L500 apply equally to the AE500.

Those of you who follow the home theater industry closely are aware that the L500 is a strong competitive rival to the Sanyo PLV-Z2, a product we spoke enthusiastically of in a recent review. They are competitive rivals due to their many similarities. Both will be found selling for street prices around $2,000. They are both 16:9 widescreen products with a physical resolution of 1280x720. They carry similar brightness ratings (850 lumens for the L500, and 800 lumens for the Z2). They both claim contrast ratios up to 1300:1. They have almost identical throw distances. And they both offer DVI inputs with HDCP.

Having just posted a rave review of the Sanyo PLV-Z2, the big questions on everyone's mind will be these: What are the differences between these two projectors? What advantages does each have over the other? Does one represent an inherently better value than the other? Thus it makes sense to present the L500 review in a shoot-out format against its primary competitor, the Z2.

Before we get into the nitty-gritty comparisons, we will say up front that the Panasonic L500 is an impressive product that we are including in our list of Highly Recommended Home Theater Projectors. It is an excellent value and represents a formidable alternative to the Sanyo PLV-Z2 which was added to the list last week.

Comparative Assessment by Feature/Function

The best way to get to know these two projectors is to simply do a straight comparision by each feature and function. So without further delay, let's get to it...

Brightness ratings. The L500 is rated at 850 ANSI lumens, and the Z2 is 800 ANSI lumens. Now the novice projector buyer may assume from this that the L500 is the brighter of the two machines. This is why you want to ignore spec sheets, because nothing could be further from the truth.

Brightness ratings are always a can of worms, and largely misleading indicators of performance. Any projector is capable of delivering higher lumen ratings by calibrating it to boost brightness at the cost of contrast and color balance. Brightness ratings are usually calculated based on these rather artificial calibrations. Furthermore, any projector with dual lamp modes (as both of these projectors have) can be set on high to maximize lumen output, or low to minimize fan noise and extend lamp life. Most home theater users, if they have a light-controlled environment, will opt for the low fan noise setting that reduces lumen output. Also, some projectors have optional features that can influence brightness and contrast. For example, the Z2 has a variable aperture adjustment on the lens. You can close it to increase contrast and reduce lumen output, or open it to improve brightness at the expense of contrast. The correct setting depends in part on the amount of ambient light in the room, and in part on personal taste.

By the time you are done making all the calibration adjustments to optimize for your taste preferences for best video in your given viewing environment, there is no chance that the projector will be outputting anywhere near its theoretical maximum lumen rating. Thus the spec ratings of 850 and 800 lumens on these two projectors are not relevant to anything in real life.

In point of fact, when we were done calibrating these two units for optimum video performance, we had several lumen readings as follows: the PLV-Z2 measured 615 lumens in high power mode with the aperture wide open. Closing the aperture to its minimum position (to obtain maximum contrast) dropped the lumen reading to 396. Low lamp mode reduces lumen output on the Z2 by about 20%. So the lumen readings in low lamp mode with maximum aperture was 497, and with minimum aperture was 315.

The L500 does not have a variable aperture, but like the Z2 it has a low and high power lamp mode. In high power mode the lumen reading was 410, and in low power mode it was 320.

In essence, the L500 and the Z2 are virtually identical in lumen output in both high power and low power modes when the Z2's aperture is closed to its minimum. If you open the Z2's aperture to its maximum you will increase lumen output by over 200 lumens, which is over 50%, at the expense of some contrast performance. You would want to use this option if you have ambient light in the room since ambient light hammers contrast anyway and the additional lumen output will help counteract the effect of the ambient light.

Thus you might think of the Z2's variable aperture as a "party" feature. When you have a dark viewing space and you want to view movies at their best, close the aperture to maximize contrast. In a party environment or other social setting where you want to introduce some indirect light so folks are not in the dark, open the aperture for maximum brightness. If you see yourself using the projector in both of these types of viewing situations, the Z2's variable aperture is a feature you will want to have. If on the other hand you are planning a dedicated home theater environment where viewing will usually be in a darkened space, the L500 and the Z2 are equally good choices as far as lumen output is concerned.

Contrast. Contrast ratings can be as confusing and misleading as lumen ratings on a spec sheet. In the present case both the L500 and the Z2 are theoretically capable of delivering up to 1300:1 contrast. But both machines have varying contrast performance based upon how they are operated. The most significant influence on the Z2's contrast is the setting of the variable aperture, discussed above.

The L500 also has a unique feature Panasonic refers to as Artificial Intelligence, or AI. The AI feature boosts dynamic range in the image by both brightening the highlights and deepening blacks in real time in response to the source material being fed into the unit. You can choose one of three settings. According to the L500 manual, AI-1 is for material that is expected to contain a lot of dark scenes, AI-2 is for material expected to contain a lot of bright scenes. The third setting is OFF, and the AI feature is deactivated. It is important to note that the AI feature does not operate at all when the projector is in low lamp mode.

Overall, we found that in a typical viewing space allowing for some reflected ambient light off walls, ceiling, furnishing, etc., the contrast performance of these two units is pretty much identical when the Z2's aperture is at its minimum setting. The L500's AI feature produced marginal improvements in contrast. But other factors such as reflected room light and your choice of screen size (the larger you go the lower the contrast) will have much more overall impact on actual contrast results than will the activation or deactivation of the AI feature. These external factors affect both projectors in the same manner and magnitude.

Neither of these projectors is overly bright. That means that apparent contrast fades fairly rapidly as you increase image size. As noted in the review of the Z2, although you can stretch the image quite large on these units, you will obtain better contrast and color saturation results if the image is kept to no larger than about 100" diagonal.

Screendoor effect and pixelation. The screendoor effect that has bothered many folks with LCD projectors is not an issue with these two projectors. The resolution is high enough, and interpixel gap small enough, that no screen grid is visible from normal viewing distances.

On the other hand, if you get close enough to any projected image you can see a texture in the image that is caused by the pixel structure, just like you can see scanlines if you get close enough to any television. The visible pixel texture is known as pixelation, and it is a slightly different issue than the screendoor effect. The question is whether the pixel texture is visible in the image as viewed from a normal distance?

On close-up examination of the projected image, the L500 has a less distinct pixel structure than does the Z2. Thus it can be viewed at a slightly closer distance without pixel texture becoming visible. Pixelation typically becomes visible in solid whites such as text and credits before it becomes noticeable in the video image. In solid whites, the pixel texture becomes visible on the L500 at a distance of 1.0 times the screen width, or about 7.3 feet from a 100" diagonal image. Beyond this distance whites look solid white with no texture at all. On the PLV-Z2, the pixel texture disappears at about 1.15 times the screen width, or about 8.4 feet from a 100" screen. Therefore, though the L500 has an advantage in reduced pixelation, the advantage is not as great as it was on, say, machines like the lower resolution PT-L300 as compared to the Sanyo Z1. Thus if you plan to have a viewing distance of 1.3 times the screen width or greater, visible pixel structure is a non-issue on both projectors.

Deinterlacing. All digital projectors have on-board deinterlacers to convert interlaced signals (such as those you get from composite video, S-video, component 480i and HDTV 1080i) to progressive scan format. This is necessary because unlike the CRT system in your television, LCD panels and DLP chips are exclusively progressive scan devices. Onboard deinterlacers can vary in quality, and they do vary between the L500 and the Z2.

Deinterlacing on the L500 is excellent. We could detect no difference in image quality between interlaced component 480i input and progressive 480p input. In fact, though the difference was subtle, it seemed that component 480i had a slight edge in image smoothness, lending it a marginal edge in filmlike quality. This was only evident in a direct A/B comparison test however. In a blind test no one could guess which input was on the screen. So the difference was not dramatic.

On the other hand, we did find occasional artifacts on the Z2's interlaced input that did not exist on the Z2's progressive input. Progressive 480p looked a bit sharper and more stable, and is the preferred input for analog video on this machine.

Thus in short the L500 and the Z2 produce comparable images with progressive scan inputs, while the L500 has an edge over the Z2 with interlaced signals.

Color. Color decoding is exceptional on both the Z2 and the L500. We do not see any advantage of one over the other here. Both units are superb, and both outperform the large majority of other products anywhere near their price range. Color saturation is also as good as it gets on both of them. Few DLP products in this price range, even those with notably higher contrast ratings, can approach the saturation you get from either the L500 or the Z2.

We found it easy to zero in a neutral gray scale on both machines. However the L500 has got a wider variety of menu controls that allow the dedicated videophile virtually unlimited tweaking capability. These include separate controls for high, mid, and low range gamma as well as independent brightness and contrast controls for red, green, and blue. If you are the type of user that invests in a good light meter and calibration disk and wants to make detailed precision adjustments, you will find the L500's image control options more to your liking.

Connection panel inputs. The L500 offers a bit more versatility here. It features both a DVI-I (digital/analog) port as well as a standard 15-pin VGA port, along with composite, S-video, and 3-RCA component ports. The L500 also has a 12-volt trigger that can be used to activate an electric screen or dim the lights. The Z2 has essentially the same connections minus the VGA port and 12-volt trigger.

Fan noise. Both the L500 and the Z2 have a high lamp mode with more noticeable fan noise, and a low fan mode with almost silent fan noise. The two projectors are virtually identical in fan noise in both modes. The louder of the two operating modes is not all that loud. In a home entertainment or party setting, the higher light output is desired and the fan noise is not of any consequence. In a "serious movie watching" setting, the lower setting on both units would be preferred, especially in a small viewing space, but many users would not find the louder, brighter setting objectionable. Both Sanyo and Panasonic have done a fine job with fan noise control on these units.

Fan exhaust. We noted in the Z2 review that its fan exhaust is out the side of the unit, making shelf mounting a viable option. The L500 exhausts out the rear, but just out the right rear quarter panel. Shelf mounting is an option for this unit as well, but you will want to give it about a foot of rear clearance and install a deflector that redirects hot exhaust away from the rear of the unit and out to the side. As with all digital projectors, a little bit of attention to proper heat dissipation during installation will prevent overheating and promote longer lamp life.

Lenses and throw distance. The Z2 has a 1.3x manual zoom/focus lens, whereas the L500 has a 1.2x manual zoom/focus lens. Thus the Z2 gives you a bit more leeway in placing the projector to produce any desired image size. They are very similar though. To get a 100" diagonal image from the Z2 it may be placed 10 to 13 feet from the screen. The L500 needs to be placed 10 to 12 feet from the screen for the same 100" image.

One of the Z2's advantages over the L500 is its vertical and horizontal lens shift, a feature the L500 does not have. Vertical and horizontal lens shift allows you to physically move the lens up, down, or sideways. This lets you change the location of the projected image relative to the projector, contributing to an easier installation process. (More on this feature in the Z2 review). If you plan a fixed installation, you will use this feature during installation, then probably never touch it again. If you anticipate portable use in multiple locations, or setting it up periodically on a coffee table, the lens shift capability will be a valuable feature to you in the long run.

The L500's lens is fixed, and therefore so is the throw angle. It is set so that the centerline of the lens intersects the image at a point about 12% of the picture height above the bottom edge of the image when table mounted, or 12% below the top edge of the image when ceiling mounted. Therefore, if you are planning to ceiling mount the L500, you must take into account a drop from the ceiling that will position the image where you want it. If you don't want a drop from the ceiling, the other alternative will be to mount it flush with the ceiling and tilt it downward. This will require the use of the digital keystone correction feature to square up the image and eliminate the trapezoid that will result from the tilted projection angle.

Digital keystone correction. Digital keystone correction internally rescales the image within the 1280x720 physical pixel matrix to create a mirror-image trapezoidal shape on the LCD panels that corrects the rectangular distortion you get when the centerline of the lens is not perpendicular to the screen. Basically, if you are projecting at an angle that produces a trapezoid, you can click the keystone button to square it up. The benefit of this feature is that you can project an image at oblique angles such that the centerline of the lens is not perpendicular to the screen and still end up with a rectangular picture that fits the screen. Thus you have greater latitude in arranging the placement of the projector relative to the screen.

Both the L500 and the Z2 have vertical keystone correction, allowing you to place the projector higher or lower than you could without this feature. In addition, the L500 has horizontal keystone correction as well; the Z2 does not. This allows you to place the L500 to one side or the other from center and correct the resulting horizontal distortion.

In general we recommend that you avoid the use of keystone correction if at all possible for several reasons. First, the rescaling process on many projectors can slightly soften the image, and it does so on the L500. So if you use the L500's keystone feature you will end up with a picture that is not quite as sharp as the image you'd have without it. On the other hand the Z2 does not have this particular problem. The scaling system on the Z2 retains image sharpness through the whole range of keystone adjustments. So if you needed to use a vertical tilt on the Z2 and correct it with keystone adjustments you can do so without loss of sharpness.

Nevertheless, on any projector the use of digital keystone adjustments results in a reduction of pixels in use and a reduction in lumen output since a portion of the pixels on the display are rendered black to accomplish the reshaping of the image. A mild keystone adjustment won't matter much in this regard, but if you made aggressive use of keystone adjustment, say up to the 30 degree limit on these projectors, you would indeed compromise both physical resolution and lumen output. Furthermore, the aggressive use of horizontal keystone adjustment will always result in a dimming of the picture, not only from the reduction in pixels in use, but also because shooting the image at the screen from a radical angle will cause light to bounce off at the opposite angle, rather than back toward the center where the viewers are likely to be located.

The bottom line is this. In general, try to avoid the use of digital keystone adjustment on the L500. If necessary, the Z2's vertical correction can be used to make mild corrections without noticeable degradation of the image, although we'd suggest keeping any needed adjustments to a minimum. The combined use of the Z2's physical lens shift plus mild keystone adjustment only if necessary should be sufficient to cover a wide array of installation challenges.

Warranties. For those concerned about warranty coverage, be aware that the price you pay for the PLV-Z2 includes a standard 3-year warranty, whereas the PT-L500 comes with just one-year coverage. Extended warranty coverage may be available at extra cost.

Final thoughts

The Panasonic PT-L500U and the Sanyo PLV-Z2 are both outstanding products for the money. They both represent significant advances in image quality from their predecessors, the PT-L300U and the PLV-Z1. They are both head and shoulders above other products in their price range, and they set new standards for image quality under $2,000. In terms of pure image quality there is not a significant difference between them-one does not noticeably outperform the other. This will lead to lots of spirited arguments between happy users claiming that the one they've got is better than the one they don't have. Frankly, you can't lose with either machine.

With respect to pixelation, many will recall that the lower resolution Panasonic L300 had a real advantage over the Sanyo Z1 in reduced pixelation. This as much as anything contributed to the L300's ability to command higher street prices over the past year. However, Sanyo has closed the gap on this disadvantage with the release of the Z2. Though the L500 still maintains an edge in reduced pixelation, the difference is not nearly as great as it was between the L300 and Z1.

Though the differences in image quality are difficult to distinguish, the dedicated videophile will find subtle refinements in the L500 that give it an edge over the Z2. And the tweaker will certainly enjoy the wider array of gamma, brightness, and contrast controls offered by the L500. If part of your joy as a home theater enthusiast is derived from the pleasure of attaining and maintaining perfect calibration of the projector then the L500 is the better choice for you on two conditions. First, your installation plan can be achieved with the L500's native throw distance geometry without relying on keystone correction. Second, you plan for viewing in a light controlled environment and would not need extra brightness in exchange for a reduction in contrast as is offered by the Z2's variable aperture feature. Under these circumstances we would say the L500 is the best choice you could possibly make for the investment.

If on the other hand you feel the Z2's lens shift, vertical keystone potential, and variable aperture features are going to be helpful in your installation and ongoing usage, you can go for the Z2 with the assurance that any sacrifice in image quality is subtle indeed. In point of fact, if anyone familiar with both of these machines were shown just one of them in a demo room, they'd have a 50/50 chance of guessing which one they were looking at. So we are talking about subtle differences that can only be detected in a direct side-by-side comparison.

The Panasonic PT-L500U and Sanyo PLV-Z2 are both impressive achievements. Both advance the state of the art and set new benchmarks for image quality under $2,000. Both are highly recommended, each for their respective advantages over the other.