Virtually all projectors and plasma screens have the ability to accept higher resolution inputs than they are designed for (the exception is purely video projectors). For example a projector designed for SVGA (800*600) will accept XGA (1024*768) input and compress it to SVGA for displaying. It is always preferable to specify a display device designed for the resolution of your presentations as compression invariably involves some loss of detail.
Compression is also used in video systems. For example DVD's use MPEG-2 compression to fit reasonable amounth of video onto a disk.