The main advantages of commercial digital theaters over home cinema are I believe.
Color gamut the range of colors that can be displayed. Digital theaters use xeon lamps and different filters to get a larger gamut. Still not as large as traditional film stock cinemas and no where near as large as the full range of visible colors you can see. For consumer displays xvYCC is an attempt at increasing the color gamut.http://www.efilm.com/colormatrix/colormatrix.htmlhttp://www.youtube.com/watch?v=x0-qoXOCOow
Color bit depth the number of color shades that can be represented. Digital Cinema in theaters has a lot more fine graduations than home cinema. Color graduations look smoother, no visible banding. This becomes more of an issue the larger the color gamut. Deep Color is an attempt at increasing the consumer display bit depth and is designed to be used with xvYCC color gamut, to prevent color banding.
Thanks Aidoru for correcting me, commercial digital theaters use 12bit depth. I have read that 12 bit is the minimum needed in theory for most people to not see banding and is the standard for the source.
Digital film and video for the consumer market is usually mastered and processed at 10-bits or higher, but blu-ray uses 8-bit. Still many displays can not even handle 8-bit on a per pixel per frame bases they have to use temporal or spatial dithering to cheat. I have Darkchip3 DLP, according to Texas Instuments darkchip3 is capable of displaying 10-bit depth but I assume that is with a 1xspeed color wheel using just RGB segments, with typical 4x and 5x color wheels it is probably having to dither to even display 8-bit. For consumer projectors LED dlp should be capable of greater bit depth due to no spoke time and a more dynamic light source.
One reason commercial digital theaters use 3chip dlp is I assume because it gives the ability to display greater bit depth without relying on dithering. The other reason being greater brightness without inducing the dlp rainbow effect.
Resolution of commercial digital theater is higher than home cinema but not massively so with 2K (2048×1080) or 2.2 MP at 24 frames per second. The resolution advantage is being increased with 4K digital cinemas (4096×2160) or 8.85 MP at 24 frames per second. Resolution in effect equals minimum viewing distance or maximum image size before pixel structure becomes obvious. This determines how much of your field of view the image occupies. THX Home cinema recommends the image is 36 degrees or more of your field of view, a front row at the movie theater is about 90 degrees, the middle row about 50 degrees. This is so the image occupies the central detail sensitive 20 degrees and some of the motion sensitive peripheral vision, so motion on the screen looks like motion in the real world. This has the effect of making the image more immersive.
Unfortunately for commercial cinemas the biggest wow factor for picture quality in my opinion is perceived image depth, looking into the image rather than at it, the image as they say justs pops out of being a picture and into appearing three dimensional. This can be done using visual cues/illusion but usually needs good contrast levels with a low black level. Consumer displays at least those bright enough and with a high enough contrast ratio to be setup with a high gamma can look stunning in a batcave. I am one of those who does not believe display gamma should be 2.2, I prefer 2.5 in a batcave. Commercial theaters due to health and safety, in the UK at least, nolonger go to complete blackout like they did when I was a kid, so the image these days is always compromised. I have read commercial digital cinemas reference values are on screen sequencial contrast of at least 2000:1 and ansi contrast of at least 150:1. But actual digital theaters can be as low as 1200:1 sequencial contrast and 100:1 ansi contrast and still be within spec. (Traditional film print has a maximum contrast ratio of about 400:1 [less on screen due to lens flare,etc..], with sequential contrast of about 1600:1 pre 1997, and nearly 4000:1 from 1997). "Real3D" is an attempt to give commercial cinemas more image depth. I have seen Monsters vs Aliens in real3d and was not impressed, but I will give it another go with Avatar.
In my opinion the blu-ray spec should of made a greater leap in image quality with color gamut, bit depth, 3D standards. These now all seem to be on the drawing board but I can not see them getting wide support except for 3D. After all superbit DVDs did not out sell the DVDs with all the extras.
In effect Blu-ray is the same picture as DVD just with a higher resolution. In comparison to DVD it is much better. Fine details have more contrast, since it has a higher resolution and unlike dvd the image is not pre-smoothed during mastering (to reduce intelace line twitter and reduce the amount of data to be encoded) and possibly incorrectly de-interlaced or suffering from high frequency roll-off at analogue output due to the video dac and filters, colors may also have better saturation in fine details due to higher resolution and not using analogue output video dacs and filters, also with a matching display resolution you can use pixel to pixel mapping so no softening due to scaling. Some blu-ray players also have image processing to improve the image quality with detail enhancement.
I do however think they should have made 50Hz output part of the spec for PAL region players, since in the UK we are not used to 24frames per second flicker or 60Hz motion judder, and now need to rely on the display to be capable of doing a multiple of 24frame per second.