I've had a Sony 720p projector for two-three years now (though due to my constant moving around it's only seen about three-four months of use...), and after recently conducting a brief survey of the world of display technologies, I am still convinced that it is by far the best single solution for PS3 and 360.
What's more, the good news is that the prices of these things have been falling quite steadily all this time. My projector had cost me around €1,200, whilst nowadays comparable products seem to go for around €700. Here's an example:
http://tv-video.fnac.com/a2752858/Video ... ?PID=63788 (€699)
And a really cheap by Acer for €529.
http://tv-video.fnac.com/a2652284/Video ... ?PID=63788
Meanwhile, it seems that 1080p projectors have begun appearing... Perhaps they existed even in 2007, when I bought my 720p one, but in any case if they did they must have been exorbitantly expensive, whilst now they go for about as much as I had spent then. Here's one by Epson for €1,199:
http://tv-video.fnac.com/a2750069/Video ... ?PID=63790
It goes without saying that 1080p projectors are not really for console gaming yet (with the exception of five or six games...) -- they are exclusively for high-end PC gaming. So I am not really in a hurry to get one yet. After I manage to put my new PC together, though, I'll start thinking about it.