The thing with projectors is that you are getting a lot of screen yardage for the price. The more yardage you have the more noticeable the resolution.
While that is a decent price on a projector, long term you will likely be much better served looking for one with higher resolution and good feedback on service life.
I wouldn't be overly concerned with service life on the bulb (which is what most people are thinking of when they think of projector
life). The bulbs can cost $200-$400 depending on the specifics. But I've had my projector
for a long time (it's an old NEC LT2K, 1600x1200, 3000 lumens) and I've only got 600 hours on it. And the bulb is rated for 2000 minimum. I figure by the time the bulb blows out, it'll be time to upgrade my technology to something better.
The most important thing to look at IMO is the light intensity. This depends greatly on your room's lighting situation, but 1200 lumens is NOT going to cut it unless (a) it's a very short
throw, like about 3 feet!, and (b) the room is already pretty dark. Remember that the longer the distance from lens to surface, the more the light will spread out, which means a less intense picture overall.
Be aware that cheaper short-throw projectors will look terrible on the longer throws as they won't preserve the image correctly -- the outside corners will appear to bow (or stretch) outwards from the center of the picture. This is because the light in the corners is traveling farther that the light in the center and the lenses are made for certain distances and beyond those distances, the distortion becomes noticeable. In other words, be sure to buy one for the ranges you think you'll want; outside those ranges you may find the picture untenable to look at for long periods. (No, keystoning and/or cornerstoning cannot fully correct for this. The projector
's keystoning abilities are typically taken into account when the throw ranges are quoted in the specs.)
Be careful about the surface you're going to use to project the image onto. Some surfaces are very good and others are... less good. I've found that projecting onto a painted wall is pretty bad in most cases. Unless you have a wall painted with a semigloss paint, there is just not enough reflectivity and the image will look washed out. Not to mention that even a wall painted white will tend to have a slight yellowish tint to the images you project. (I had a friend tell me how it was based on the paint pigments reacting to certain wavelengths of light, and how it doesn't normally matter since a myriad of colors are not typically on a wall.)
I would recommend checking out http://www.ProjectorPeople.com/
A friend of my wife's works there (Carmen) and she really hooked me up in terms of knowledge and equipment (there's a lot to learn). ProjectorPeople is a spin-off of AVI (Audio/Visual Inc), the largest wholesaler of audiovisual equipment in the U.S. (They also sell retail now and have for a few years.) I ended up with the NEC I mentioned above, plus a nice screen (almost $800 for the pull-up screen back in 2005; but if you see the difference between wall and screen, you'll never want to use the wall!).
I now get to play GT5 on my PS3 on an 8-foot diagonal screen! Woohoo!
Displays are one of the few things I spend closer to high end on (for either computer or living room) because they normally have a relatively long life span which makes them a decent return on the extra investment.
Projectors have a shorter life than TVs, generally, due to bulb life. It's just not cost effective to spend $400 on an older projector
when a new projector
might be only $800 and that includes a bulb.
I'm now spending 4-6 hours a night with my PS3 when I'm playing (probably 3 nights a week), so I expect the bulb will be gone within two years. When that time rolls around I'll decide on the new bulb/projector
question based on the technology and prices.
Who knows? Maybe carbon nanotubes will have replaced all visual screen components by then?! (Not likely!)