I am in a band and part of the act includes videos in the background. We are looking for a projector that is about $400 - $600 that can handle the lights on stage. We are talking bars..not Madison Square Garden... :-)
LED? LCD? how many lumens? any good recommendations?
In that price range you are talking wxga/xga LCD projectors, or at the $600+ end, a DLP (something like this: http://www.avsforum.com/t/1445598/official-benq-mw519-thread). Don't worry about contrast get as many real lumens as you can get. Unfortunately the budget does not allow for (ultra) short throw units, that would allow you to place the projector out of the way, right in front or at the back of the (lycra stretch) backdrop.
I did see some UST models at the ISE tradeshow last week, from Vivitek Optoma and so on, but found the cheapest lacking in light-output, so UST does not fit your budget, so it will have throw across the room.