Projector and Screen recommendations

Doesn't appear as though a front projector is right for you.

Another recommendation to consider the Mits 4900. I have one and it is a great 1080 projector for not much money than a 720. It is very bright even in low lamp mode where the bulb will last "stated by the manufacturer" 5000 hours. Kirkus has a great recommendation to look at grey screens, especially if you are looking under 100 inches. My screen is about 13 feet away and 100 inches diagonal and the brightness is great with a 1.0 gain screen. There are quite a few grey screens around that gain and they will give you better blacks. IME the two weaknesses of this projector are the poor on board processing (fixed with a good upscaling dvd player), black levels and the slow iris. The black levels do not bother me that much, but the auto iris is really distracting on some movies. Despite its weaknesses it does everything else great and I am still very happy I chose this projector. With that screen size stated above and at that distance the image would be too bright for me in a dark room even on the dimmest setting, but with a little light I am not sure if it would be better. Maybe someone with more knowledge could say if a low gain screen would be better at that size and distance.

I have a setup like the one you are planning to develop: windows behind the screen, Panasonic projector on the ceiling, and the most inexpensive pull down screen (by Elite Screens) that I could get. I was concerned about the screen in particular, but when I installed it, I was surprised by how not bad everything worked.
Even though my room is very bright, it is absolutely beautiful when I watch Roger Waters or Pink Floyd DVD's and I can still see the sunset on the right side of the window (my room is facing West).
If you plan to use your system during the day, the light intensity in your room may be the only thing you need to consider.

Follow some of the leads above. Lots of discussion.

I also have the Mitsu 4900HC projector. I moved from a Panasonic 720p projector which had a very nice and bright picture. Up until recently, I thought it was a tossup between the two; the Panasonic having a more three dimensional and brighter picture and the Mitsu having more detail but less contrast. I have to agree with the posters above about the scalar in the Mitsu; it sucks. The scalar in my TivoHD is better than the scalar in the Mitsu. The scalar in the Panny is better than the Mitsu. About 3 weeks ago, I started running the video through the scalar in my Anthem Statement D2 and have to say the picture improved about 30%. The picture is every bit as good as the Sony VPL-VW60. And at night time, when the room is pitch dark, the picture is vibrant, detail and three dimensional. I actually prefer the Mitsu over the 42 1080P Panny Plasma in the bedroom know. (I'm sure if I hooked the Panny Plasma up to the Statement D2 the picture would be a lot better, but I don't have the funds, or the need to get another D2 for the bedroom.)

So, I have to agree that the Mitsu is a lot of bang for the buck, but make sure you pair it with a good scalar. BTW, the scalar in the Comcast HD DVR sucks too.