i would not personally buy a screen larger than i can project. i hate the look of 'gaps' on the screen.
when i left my parents house, i took my projector with me, but left them the screen and got them an LG LED projector for them. The projector had very little zoom, and we couldn't place it in the ideal spot without making the furniture placement ridiculous. They happily used the thing projecting a 97ish inch image on a 106inch screen for years. It annoyed me, but that projector was such a massive step down from what i'm used to, it was hard to pick just one thing
if we were talking a bigger difference, like 100inches vs 120inches, i'd probably say deal with the border. 110 vs 116 is barely significant imo. I suspect that if you walked out of the room, and somebody changed sizes, and you walked back in it would take you a few minutes to figure out what happened. I recently downsized from a 72" tall, to 65" tall screen( ~146" to 132" diagonal) and i honestly struggle to notice any difference. It certainly has not decreased the experience for me. 110 vs 116, is like the difference between sitting straight up in your chair, or reclined. It's going to be pretty subtle imo.
unfortunately, ALL of these things are extremely personal. So, just because these were my experiences, doesn't mean they will be yours. I also think the viewing distance will be important here. as for the projector upgrade, am i correct in reading that this will happen pretty soon? why not wait for that just in case it allows you to fill the larger screen?
Displays: Samsung PN64F8500/JVC X35
AVR: Pioneer VSX-1130K, 7.1/5.1.2 audio
Sources: HTPC, PS3, XBOX360, Wii
Control: Harmony One