I project onto a wall and I get people all the time go up to the wall and touch it because they have a hard time believing it. I own several screens and have projected onto them at the same time as the wall, overlapping the two and to my eyes, cannot tell a difference in quality. I only have cheap 1.0 gain screens, so maybe that's the reason. I've projected onto more expensive slide projector screens that my dad had, just to see how it looks, and the added gain, makes a difference, but not enough for me to justify going out and spending a bunch of money as my wall satisfies me right now. So to the poster, I would suggest projecting onto a wall first and seeing how it looks, and decide on a screen later. Having the wall is nice cause you can at least adjust the size and decide on what you might want to settle with if your set on getting a screen.
I think the reason they sell screens, is not necessarily because the picture is so much better, but because many people need one to pull down in front of windows, or tvs, or walls with pictures or shelves on them. Most people don't have a big empty wall to project on, so if you do, its a nice option to save some money.
Coderguy: I have not heard there is a loss of ANSI contrast, I haven't noticed that on my wall compared to the screen, although, I have no way to measure contrast either. How much loss have people measured? If anything I guess that's a good reason to get a screen, as every bit counts. Have you heard any other negatives besides the border, which I think makes a huge difference in itself.
Far as the store telling you the picture is superior on the tv, maybe the tv has some benefits that the pj doesn't, however, from my own experience, I think the projector looks much better. Im not sure how to explain it, but an LCD tv looks more computerized or digital, more unfilm-like. It does not give me the sense that I am at the movie theater as the pj does. The picture to me looks more natural and the size lets me see all the details that are missed with a little 40 inch tv. As a matter of fact I recently watched a couple movies on the pj, then tried to watch them on the tv, and the experience was so different and bad, that I couldn't finish them, it just pulled me completely out of the movies. I even caught myself squinting a few times to make out the details. When people ask me if a pj makes a difference, I just say, "Does going to the movies make a difference to you". For some it makes no difference, to others, it makes a huge difference. I think if it didn't make a difference, movie theaters wouldn't be spending so much money to make the screens so big.
If you hang the pj on the ceiling, you can still create an area that you can play the wii on because the pj creates a cone shape like this < towards the screen, so if your not standing in that, your ok. My old setup I had the pj up about 4 feet from the ground, but put the pj offset to the side, and we could play right in front of the 150 screen no problem.
Has owning a pj changed my movie experience? Definitely yes! before I bought one, I thought movies were cool, but nothing more, now people tell me I am a bit obsessed with them. Getting a pj feels so much more immersive. Now when someone asks me to come watch a movie on a tv, I pretty much cringe, because to me it just doesn't make any sense, it feels dull and lifeless and all the effort that the director put into framing a scene is lost because its so small I can't appreciate everything that's there. So I'd say jump in, with that size room, you can easily go with a 10-12ft screen. Personally I wouldn't go with anything smaller than a 110, but that's me.