If you have a excellent room, with dark walls, dark ceilings, and dark floors with zero ambient light, then front projection can look as good or better than most other display technologies. You should expect movie theater (or better) results with decent light control. Since you didn't describe your room, I can't tell what type of results you really should expect.1. I never used a projector before - I mean aside from stuff at work/school I never used one for watching movies. This is the main reason for this purchase, I would like to be able to watch movies (mainly blu-ray content). Currently I have 2 year old 55" samsung 6900 series TV and I love it, but I would like to have an option to watch content on a bigger screen (120"). Is the quality drop going to be significant? Is the above HT1075 a good choice or I should aim for something more expensive? My budget is $1000 but if there is a huge increase in quality I could push it to $1500 (but would rather not).
There is also no reason to spend more on the W1075 over the W1070 unless you need MHL. The general recommendation is to get the W1070.
Almost all projectors have zoom lenses. You zoom in, you zoom out, you zoom in the middle. Zoom is fine, and standard, much as it is on any decent camera.2. Projector will be placed 12' away from the screen. Seating will be at 11' away from the screen. I tried to use the following throw distance calculator (http://www.projectorcentral.com/BenQ-HT1075-projection-calculator-pro.htm) and if I understood correctly, this projector will output image size 110" at that distance with zoom set to 1.0. Is zoom really bad for image quality?.. Should I choose a different projector for my room?...
Learn to use that calculator properly that you were looking at and ask questions if you have any.
With the W1075 you can get a 120" diagonal with the lens between 10' and 13'1" from the screen.
If you are running wiring behind drywall, and it's a tough run, then you should run 1.25" flexible conduit from Carlon. If it's easy to swap out your HDMI cable, then just run it and run a new cable later if necessary.3. I am planning to run only HDMI cable (and power) to this projector.
No.4. Is the sound going to be an issue if the projector will be right above my head when watching a movie?..
You will hear it from time to time, but it's not obnoxious and you want it right above your head vs. in front of you or behind you as sound comes from the front, back, and sides of the projector so sound is louder when you aren't directly below it. Still, not obnoxious or nobody would have ever bought it.
No, it's a bad choice really. If you can use a fixed frame screen like an Elite SableFrame screen then you should do that. But, if you must have a retractable screen and you can't get a tab-tensioned electric screen, then getting a cheap manual screen is a perfectly fine way to handle things.5. Is the pull-down screen a good choice?.. Targetting 120" screen.
It means that the projector is bright enough to handle a bit of ambient light in the room and still look good. That's why it says that right in the calculator. Ignore it. It's fine.6. I attached a picture from the throw distance calculator. Why that line has red sections? Does it mean this projector is a bad choice for my room?...
Make sure you understand projector placement before you buy.7. Finally - any tips for a person who never used a projector before? Is there anything else that should know about? Should the projector be calibrated?.....
Not only MUST the W1070 be placed between 10' and 13'1" lens to screen, but if you intend to have the projector up high, then the projector must be upside down and must be between about 2" and 5" above the top edge of the screen image. All measurements are from the front center of the lens itself.
Yes, you should calibrate, but the W1070 looks very good out of the box.
You should get a good ceiling mount. I recommend the Chief RPMAU which is pricey, but excellent, and lasts forever.
Maybe attach some photos of your room and do a bit more reading and research before your purchase, but things sound good to me.