Higher resolution works better when you need to read fine text -- like the credits for movies.
Some Blu-ray players have problems with some 720p projectors. I had to help one person figure out how to set the output resolution of his player to a fixed 720p before it would work with his projector. The player's setup menu would output at 1080p, but the projector wouldn't actually scale it down to show it. He just got a blank screen. In principle, that shouldn't happen with modern projectors, but it's something to be aware of. (It worked fine with a TV, so he used that to set the player's resolution before plugging it into the projector.)
Marantz SR7009/7.1.4/FH+TM/DefTech PM1000/LCR+TM amped