the image on the projector is not washed out if you have light control. I have a 42" plasma in my room and a projector in the living room. The image from the projector is better by far. With good light control, the image from a good projector is really quite stunning.
Totally agree, if you have a proper set up. Cannot compare video projectors with business presentation projectors.
And if the set up is properly done, the projectors are anytime better than LCDs / Plasma. If you compare with size, the Projector is definitely cheaper. 42" is too small for living room for a good cinema effect. Prefer 92" and above.