An update since some new projectors are out:
DLP: Still has the "Rainbow Effect," problem and you can't buy one without the problem for less than $15,000 to my knowledge. This problem MAY not effect you. The problem really comes from the fatigue that it can cause if you watch for certain time periods. Chances are it won't, but I suggest you view a full 2 hour movie at a store before purchasing a single chip DLP because of the problem. There are under $3000 1080p DLP solutions now, and the $5500 Infocus IN83 is pretty nice except for its 4X color wheel and the fact that it's priced out of it's performance output.
LCD: You can now get a 1080p LCD for around $1500 street (after rebate). These units are better than their 720p counterparts of just 2 years ago all around. Contrast ratios and color reproduction on the newer units is even better. The Mistubishi HC4900 is streeting for around $1500 right now (after rebate). This is a STEAL. The HC6000 is $3300 or so street. The 6000 is a big improvement over the 4900. Once you start talking about $3000 though... you're in the Epson Home Cinema 1080UB ballpark ($2,500) and in the LCOS ballpark.
SXRD: Sony's VW40 streets for around $2700. For $200 more you get the superior technologoy of LCOS (which is all SXRD really is, a slight improvement on LCOS). This little projector is also extremely easy to place, because it can lens shift two picture heights (meaning you can place it well below or above the screen). However if you aren't putting it in a dark room, I'd suggest the Epson Cinema 1080 UB. This projector has HORRIBLE light output. If it's not dark, don't bother with it. The older VW50 streets for barely more than the VW40 if you can find it. It does slightly better in light output. The VW60 streets for about $3900 and is vastly superior to the VW40. Still not very bright, but roughly 50% brighter than the VW40. Sony is HORRIBLE at advertising ANSI ratings. When you configure their units they are never even in the same ball park as the numbers they advertise. The VW60 is nice, but I think it is in a bad ball park. JVC HD-1s can be found for around $4600 and that $700 extra, is $700 well spent.
HD-ILA: Still the King. The Epson Cinema 1080 UB is nice. It pushes 3chip LCD but LCOS is superior and the HD-ILA version of LCOS is the superior of the two (SXRD and HD-ILA). The contrast ratios are real and not the byproduct of an Iris. They are the sharpest projectors under $10k too. The RS-1 is still available as the HD-1 and the HD-1 streets for around $4600. The RS1-X streets for around $5400. It is a slight all around improvement on the RS-1/HD-1. The RS1-X is HDMI 1.3 and deep color tech. Is that worth $800?
The top of the line projector imho (and many others) is the RS2. It is the RS1-X on roids. This projector has better contrast, sharpness, and color accuracy than the RS1-X and that says a lot. What it loses is brightness. Still throw this projector in a completely dark room and it will give you the best picture available on a 100 inch screen, and the most film like period. Due to the lack of light output, the RS2 can't go on as big a screen as the RS1-X or RS1/HD1. The RS1-X and RS1 can go on a 120 inch screen if you want. I wouldn't suggest anything over 110 inches personally. It streets for $7,500.
JVC has the most accurate ANSI ratings that I know of. They do an extremely good job of making sure the measurements are taken after the projector is configured for 6500 Kelvin. So there numbers may look low, but they aren't.
SCREENS: A lot has changed as the under $500 market is now filled with alternatives. You still have the $230 Goo Screen solution which is the best solution. Properly installed the Goo System can rival a $2000 screen (seriously). The $500 screen solutions that are available compete extremely well with many of the more expensive alternatives out there that seem to be insanely popular on the internet. Caradas, etc. make inexpensive screens that honestly suck. However there are under $500 solutions now that provide a good combo with the $1500 1080p solutions that are now available.
The above review shows exactly what you get for $1500 more or $300 less. A nice Da-Lite or Draper screen can be had for around $800 to $1100. Those screens provide the best bang for the buck still. You get much closer to reference quality like the Stewarts, but for half the price. If you can afford it the $300 to $500 more you spend on a Da-Lite is worth it.
Gray screens are no longer as big of a deal as they once were. However they are excellent choices for LCD projectors that are bright, but lack good contrast ratios. Otherwise I suggest you go white.
I generally suggest to people wanting to save a buck on an HT to invest in Goo Screens. Find someone who sells the paint and INSTALLS it, and has an EXPERIENCED Goo Screen installer. Ask to see examples if possible in other homes of their work. A GREAT Goo Screen installer can provide you a screen for $400 to $500 installed that rivals a $2000 screen. You don't have to worry about the install yourself, and it's a GOOD investment.
The $500 to $1500 you save can go towards a better projector and seriously improve your movie watching experience. That or it can go towards speakers, amplification, you name it. Even to your wallet.
I'm becoming more and more convinced that if you aren't projecting onto a HUGE screen (say over 130 inches) there is NO REASON what so ever to spend more than $7,500 on a projector. I personally have a much more expensive projector, but I also have a much, much larger screen than normal people. As much money as I spent on it all, I'm not convinced that it's a much better PQ than a 100 inch JVC/Stewart combo.
I recently compared the latest high end Marantz to the RS2 on the same screen. It was no contest. There just is no reason today to spend more money than $7500 unless you're projecting on a large screen. The PQ between an Epson Cinema 1080 UB and the RS2 is very noticable, but is it 3 times better?
The point of diminishing returns on projectors has hit the $2,500 price point where you can find an Epson Home Cinema 1080UB. It's 50,000:1 contrast ratio (yeah you read that right) and its 1600 ANSI LUMENS (which is what it will display in vivid mode) are a powerful combination that allow it to be used in many, many, circumstances. You don't have to drop it in a cave for viewing, it can handle some light. $2,500. Plus I think they got a $200 rebate going, so $2,300.
So basically right now the picture is if you want to spend less than $1,500 you have no 1080p solution, but at $1,500 you got the Mitsu HC4900 and get good contrast ratio, decent brightness, above average color accuracy, and a slightly sharp picture. For $1,000 more you can jump the Epson Home Cineme 1080UB. There you get amazing contrast, great brightness, great color accuracy (after messing with it) and decent sharpness. For $200 more you can get a Sony VW40 and put it in an extremely dark room and get good contrast, low brightness, good color accuracy, and great sharpness. For $2,000 more you can get a JVC HD-1 and get amazing contrast, good brightness, great color accuracy, and great sharpness, for $800 more you get the JVC RS1-X and get a boost in every category but also get HDMI 1.3/deep color ability. Then for $2,000 more you can get the most film like projector out there: the RS-2. Which is imho the best projector on the market for PQ on a 100 inch screen regardless of price under $35,000.
As you can see I don't even include DLP in the conversation. Because they aren't in it. They can provide you good pictures (like the $5,500 Infocus IN83) but they are priced out of their performance output. A similar performance from LCD would cost you THOUSANDS less, and they just can't compete right now. The new Darkchip 4 is nice, but $5,500 puts you up against the JVC RS-1X. Which blows away DLP.
It isn't like LCD vs Plasma where Plasma does some things better, right now DLP isn't doing much better, and it costs too much.