Hi Goeffrey,
My parents have a LCD 720p projector (Panasonic AE700E to be exact) that they use for home cinema. From what I can remember over christmas the quality of digital photos was not as good as my old second hand £10 slide projector. It comes down to resolution and dynamic range.
The slide projector has effectively 'infinite resolution', blow it up big enough and you'll begin to see the film grains, you are essentially limited by the power of your bulb to how big you can go. A digital projector is going to show something like a 1-1.5MP resolution image. It will depend from person to person if they think an A3 print viewed from half a metre or a 120" image viewed from across the room is better...
In some ways I don't think the resolution matters that much - its the dynamic range that degrades the image for me - dark shadowy areas lack detail and bright areas are blown out. Most decent home cimena places will let you try out projectors with DVD's, take one along and give it a go. You obviously get what you pay for, but prices are coming down very fast indeed.
HTH, Andy
