Walford, I assume they mean the Optoma HD66.
I was watching 720p 3d movie clips on my projector via the pc, and I believe I had a 1080P 3d clip of something, as well as some divx quality, and some 576p, they all played perfect, scaled to 720p.
My impression after playing with Nvidia 3d Vision, and the HD66 is that it will play Bluray 3d movies scaled to 720p no problem as long as you meet the minimum requirements for Nvidia 3d Vision (8600gt video or better - they are like 25 bucks online now) Other than that, it should be no problem. Converting a framepack bluray to 120hz cant begin to compare with playing modern games up high, if a TV can convert framepacked to a regular 120hz signal, than for sure the PC is capable of doing it without hesitation.
The PC I tested on is:
4 Gig Memory
8600GT(And then an 8800gt - both did fine)
The 8600GT worked fine, and then I bought a 8800GT PNY for like 40 bucks on ebay, and it did great too, even for gaming.
For the person who has checkerboard - the companies that release DLP tvs (not projectors) that are 3d ready are making a converter box that will convert 3d Bluray Frame Packed to Checkerboard. Prices are supposed to be around 100 bucks. I contacted Optoma with some questions regarding the HD66, if a converter will be available, and about checkerboard support. Well see in a day or two.