ACER H5360 720P 1280x720 2500 ANSI Lumens NVIDIA 3D Vision Ready Home Theater DLP Projector...

I know very little about projectors... Would this be good for the kids play room (occasional movie, playing video games)? There are 2 big windows with blinds in the room and it can get stuffy so brightness and loudness of the projector are important. Any other deals I should be looking at for such a thing?

I can hang the projector 12' back from the wall but there is a beam at ~6' back, how big can you project from only 6' back?

This projector for $350 is a steal. It has a number of limitations, such as a limited zoom and throw ratio. Check projectorcentral's calculator if you have narrow mounting requirements. Otherwise, it's very portable, a light cannon for combating ambient light, and throws a very good picture for the price.

I have this Projector it is pretty cool but the only thing is I can't get any external speakers to work on it if I play my xbox360 on it. Do you know of anyway I could get this to work?

I would recommend the 2 year warranty on this one. My family has two and both of them developed problems (one problem was terminal) before 1500 hours.
For a good price, I would buy another, but I would never consider it without a good warranty,
Very bright though, and while it's kind of loud if it isn't on eco mode, anything you're watching will probably drown it out.