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There's quite a lot to learn about projectors to get the best for your money and whilst I love Hexus you're better off for this at AV Forums.
Can I give you these suggestions from my experience as a happy projector owner: Firstly, get a cheap TV for quick turning-on background-noise day-to-day watching. It's not practical to use a projector exclusively because you need a dark room and it will cost a lot for the bulb, and there will be times when you just want to switch on the telly without having to fire up the projector, shut the curtains, etc. etc.
There are 2 main technologies: LCD and DLP. Read up on these, some people find their eyes can't stand watching DLP (although it has got much better).
Research projectors to find one that will suit the size of your room: they will have minimum and maximum dimensions at different "throw" lengths so you need to measure your room and then find a model that will project an image the size you want at the distance it will be from the wall/screen.
Online there are many projector comparison things that will let you see the min/max sizes for different models of projector. Believe it or not, it is entirely possible that certain projectors could throw an image that is too big for the space you have to project on!
Do really try to go future proof and get a HD projector, 1280x720 not 1080. I'd be astonished if you couldn't for £700 or ever so slightly more (you could for £800-£1000 2 years ago). You may not have Sky HD or a HD player now, but I bet you do have a PC that you could connect to it, which means you can use it as a perfect HD desktop for gaming... or watch DVDs via that. You could get some free software to upscale DVDs to 1280x720, for example. A good projector will have a range of in-built upscaling options so you could also connect consoles, Freeview box, etc. to it and use them. Trust me, gaming on a PS2, normal DVDs, even some footy on Freeview looks fantastic on a 100" image from a projector (assuming you buy a projector with the right connections).
I was always looking to spend about £400, ended up spending £850 2 years ago on a Sanyo Z3, LCD 1280x720, all sorts of connections and it came with a free extra bulb, and it's brilliant. Really glad I went for the bigger resolution.
Go for it!
Hope this helps
DM
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