WARNING: The following is my personal opinion only. I fully recognise that there will be plenty who will agree and plenty who will disagree with this opinion.
As strulon says, this video clip has been "artificially rebuilt". I would suggest this has been done by someone who is perhaps very anti DLP.
Three simple observations...
1. Even the static images at the top of the screen are flaring away in color bursts, however the rainbow effect is in fact a result of motion.
2. As the rainbow effect is apparent only to certain individuals, and is an interaction between their visual perception and the method that DLP renders the image, I do not believe it would actually be possible to capture the real effect on video.
3. Quite frankly, if the rainbow effect was anywhere near this bad, manufacturers would not be producing DLP based "video" projectors.
I would highly recommend anyone who has not seen a DLP projector to wait until they have personally previewed one, before passing their own judgement.
From what I understand, the rainbow effect was primarily an issue for a small percentage of the population, with the original 1x color wheel DLP projectors. It seems that the effect is greatly reduced on the newer 2x wheel DLP projectors (and even more so on the faster 6 segment wheels).
I will wait until I have had the opportunity to evaluate the InFocus X1 (hopefully later this week), before I form any opinion on this new projector.
I really feel that it is important for everyone to make their own first hand assessment of a projector technology (particularly given the very significant "personal taste" factor in home theater choices).
In this regard I do not think that posting this kind of dubious video clip, is in any way helpful to the readers of this forum.