Very interesting! My father was a projectionist before he had any children and, like your guest, seldom watched a feature that he was projecting; if he was watching the screen at all, it was for focus or waiting for the change-reels flash (which you can still see on some DVDs of older movies).
As far as the percent of theaters that have converted to digital, I wouldn't be surprised if a higher percentage of theaters had converted to digital than he thought. For example, my "local" $3/seat theater, which doesn't seem to have all that much cash flow, has a digital projector for each of its screens. Before the conversion, that theater's films commonly had lots of scratches, so you could tell that the film had already seen the first-run and second-run circuits and was finally showing on their screens just before the DVD releases. But about the time they got their first digital projector, something happened that cut my theater visits to almost zero: I got a big screen (46-in) HD TV, and I haven't made it to that theater since. But maybe if there is a good 3D movie (they have 3D showings now).