DLP or LCD?
There are two common technologies and two rarer technologies used in home cinema projectors. The common ones are DLP (digital light processing) and LCD (liquid crystal display), the rarer CRT (cathode ray tube) and LCOS (liquid crystal on silicon) which are used on higher end projectors.
Traditionally LCD's strengths are in colour saturation and accuracy, efficiency and image sharpness. The better saturation gives a richer more vibrant look to the picture and colours are rendered more accurately. The better light efficiency means that for a gives lamp wattage, LCD projectors will tend to give more light than dlp. Image sharpness is near perfect with LCD (like the difference between and lcd monitor and a normal CRT monitor) whereas DLP has a slightly softer focus.
LCD's weakness lies in two area's. The most commented on is the "screendoor" or "chicken wire" effect whereby you can see the pixel structure. In modern LCD video projectors this is much reduced by using higher resolutions and Micro Lens Arrays (MLA) which reduce pixel visibility. LCD's other weakness is contrast ratio which means it cannot usually match DLP for colour detail or black levels.
DLP's strengths are two fold. The most obvious is contrast ratio, which in better machines can triple the best LCD can offer, giving a more television like picture. The second is pixellation. On higher resolution DLP machines the pixel structure becomes virtually impossible to see (a result of not being as perfectly focused as LCD which is an advantage for video viewing).
The weakness is the "rainbow effect" which is the common term for the colour seperation that can occur because DLP projectors rely on a spinning colour wheel made up of red, green and blue (and sometimes clear) filters. Because each colour is in effect being displayed seperately, some people can detect this seperation.
In the end, taste applies and you should audition each type of projector before you decide on which to purchase.
For a fuller explanation of DLP and LCD please ProjectorCentrals web site please click here.