I think figure out how big of a screen you are going to go with then decide based on that.
Less then 75 inches:
I think I have seen LCD TVs now in the 75 or 80 inch range for not a ton of money. Sharp has some that are around 1500 to $2500. Big advantage is no issues in a bright room... this really is a big benefit, if you are going to be in a room with lights going on and off, etc...
Bigger then 75 inches:
If you are going to go big screen it is awesome... nothing like Halo on a 100+inch screen, very immersive (if not dizzying). For under $1700 (screen, cables and a projector) you could get a nice set up if you buy on-line. (you could spend a ton more). Lots of things to research, type of screen, DLP vs. LCD..... I am sure a tone more, its been 5 years since I looked and I am sure things changed.
Will need a receiver, speakers, etc.. as well. You could probably even get a set up for $1K that isnt bad if you go with DLP and a cheaper screen.