That's pretty much how i started in 2005. Infocus screenplay 5000, HItachi Pj-TX100, Sharp DT-510, Viewsonic Pro8100 (for 1080p) Acer H5360 (for 3D) but i prefer to stay a little behind the curve buying last year's closeouts for under $1k. It's really amazing how much projectors have improved, and get cheaper every year.
Anyway, for 420 for projector, 30 for 25' HDMI cable, 50 for a 48x85 poplar and black-out-cloth screen, built or bought mount and maybe xbox 360, cable box, bluray or even a $35 Sony SMP-N200 streamer for netflix/usb movies and a 5.1 receiver. .for the cost of a 55" lcd you can have something that pretty much looks as good but 4x the size.
i bought some material from this company
for a 7x12 outdoor screen. if you aren't into the DIY route, they do sell screens. Cheap pulldowns are under 100 from lots of places but i have no idea of the quality.
I mean, all you really need is the projector,screen, laptop and cables to start. rig up whatever boombox stereo you need to for sound, and add to the setup as you can. be warned tho.. you will