Dont know about PQ but after comparing 1280x1024 with 1600x1200, the former looks squished and doesnt seem proper. I run 16x12 with my radeon but I have heard that 16x12 has a problem with aspect ratio for DVDs. Someone else might know more on this.
I am running almost the exact same setup as you. The figure you are using of 1280x1024 don't jive. This is not a 4:3 resolution. I am running my 110LC at 1280x960x72 and the picture is excellent with the desktop still being usable. I have tried all the way up to 1800 but ended up back at 1280.
Have fun-great projector
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