Quality of still images from dslr on 110"screen

Sounds more like a weak link in the chain of source than display problems.

I don't now anything about iphoto, but does that program compress images to save space, or does it have an output resolution setting?

Just a guess here, but you may want to re-size one of those massive 18 MP image closer to what the TV can display "1920×1080" before displaying it.. i.e. Photo shop or other program that you can be sure the image is of the highest quality. Just do one you know looks bad and see if it looks better.

Your photos are well above HDTV i.e 1920X1080 therefore they are being scaled down to the projector's resolution. Either thesending device (computer) or the Projector is doing the scaling. Many projectors are not capable of scaling such a large image correctly; their vid processor is not strong enough. I would suggest rescaling on the computer and outputting the corralated size to your projector.

Also look at the limits on apple TV if it is first gen video is limited to 720p... I am not sure what it does with photos of a higher res, but either way the chip in the Apple is not great at scaling... scale them on the computer then display them or try to send them without the apple TV in the middle.

All the settings required to get good looking moving images are required to make still images look good. The Sharpness control is PARTICULARLY damaging to the appearance of still photos. If you don't know how or have the tool needed to adjust the Sharpness control to its "Off" setting (which is not necessarily Zero) you need to get into AVS Forum threads that describe how to find the best settings and what tools are needed to allow you to find the best possible settings.