I'm trying to do the same thing in my dorm room, and the IN72 looks like it would be great for your price bracket for a standard projector
However, if you are looking for anything in 720p (great for xbox 360/ps3 games), I would look at the HD1000U by mitsubishi or the Epson Powerlite 400.
I haven't actually purchased mine yet, so this is all hypothetical, but:
The problem I ran into was I can't mount a projector from the ceiling because, like you said, it's a dorm room. The mitsubishi is a great projector, but it's DLP. Apparently these have to be either very low to the ground (18 inches ish) or very high up and upside down. I don't want to put an expensive projector high up on a bookcase upside down... it seems like an expensive accident waiting to happen.
But with the LCD Epson 400 projector, you can adjust the lens to put the image wherever you'd like (at the cost of image quality, but supposedly it isn't too much of a loss). So I could set it on a bookcase rightside up and adjust the lens to get a great picture.
So, if your room is anything like mine (10.5x20, with furniture all over), I'd go with the epson. It has a great rebate right now, pulling it below 1000$. Now I realize this is more than the price bracket you mentioned, but it would have a 720P HD quality picture when hooked up to a ps3/360 with HD cables.
Also keep in mind, you'll likely need some sort of speaker system with a projector if you want any sort of decent sound. I'm not a fan of the preinstalled speakers on projectors.
Btw, if anyone reading this disagrees with what I'm saying, please speak up, as I'd rather know now before I make a 1000$ mistake