Make sure to pick a darker color for the walls and paint the wall behind the screen black if possible.
The only advantage of a flat pannel over the projector is its versility and brightness IMO and the brightness is only good for rooms with ambiant light. If you are building a dedicated theater room with controlled lighting, the projector will look better and be 4 times bigger if the equipment is properly matched and set up. If you don't have the luxury of having a dedicated theater room, I would agree that the flat pannels would be a better choice. In almost all cases but movies, I would prefer a flat panel tv because I wouldn't want to be sitting in the dark watching sports wih a group of friends because that is more of a social event.
I guess it's just a matter of opinion.
HD80 1080p projector
http://www.projectorpeople.com/proje...p?itemid=22991
Screenshots taken from avsforum.com (looks better in person)