I do exactly what you are asking. I have a Sony VPL-HW50ES and a Lumagen Mini.
Using a Seymour 2.35:1 ratio screen with Center Stage XD fabric and it works great.
Can switch from 16:9 to 2.35:1 at the press of a button. It also has a feature called NLS stretching where it essentially can fill a 2.35:1 screen with 16:9 content, which is nice for a movie like say Jurassic Park or Avatar when you want to maintain the wide screen experience. It is pretty effective in practice, looks much better than I would have envisioned - there are examples posted in the Video Processor forum and if you search on Youtube for "Brolic Beast" you can see examples of the video stretching that he posted. You can make very fine adjustments to the amount of stretching as well to customize it to your tastes.
In terms of image quality loss using the Lumagen to scale down to 16:9 (so I zoom to 2.35 and use the Lumagen to scale to 16:9), it is very slight from what I have noticed, but admittedly I have only really done A vs B comparison on DirecTV content since 99% of my 16:9 viewing is sports related and as you know DirecTV content isn't exactly the highest quality content. You can watch sports stretched to 2.35:1 using the NLS I mention above as well
I'd say I love it in practice thus far with as you said the calibration features that the unit has.
There are those on here with far more expertise than I on all of the above (Mike from AVS for example was a great help when I was researching various options - suggest you give him a shout) or look in the video processor forum as there is a great thread on the Lumagen there I believe.
Hope that helps