David, regarding your original question, a typical rear-projection TV uses 7" CRT tubes, which in general have about 1000 to 1200 TV lines of resolution, which roughly corresponds to XGA. However, at such a resolution it is slightly fuzzy, whereas XGA at native resolution is razor-sharp (and with video, maybe even TOO sharp). The advantage of CRT technology is that at ANY resolution it is "native", not requiring scaling at all, giving you NO scaling artifact. Any digital technology will ALWAYS have to be scaled unless it's at PRECISELY the resolution of its panels (and currently, NOTHING is in the exact resolution of ANY of the panels: 480i/p (NTSC/DVD), 720p, 1080i, do NOT correspond to VGA, SVGA, XGA, SXGA, UXGA, or QXGA, and require scaling. The internal scalers vary widely in quality, though the later units are fairly decent as a general rule.
I think it would be worth the extra money to get at least XGA (1024x768) resolution in light of the growing availability of HDTV materials you can display on them. For DVD, SVGA may be fine, but for 720p or 1080i, you could DEFINITELY use the higher resolution (though it would be scaled down to XGA). Basically, I recommend the highest resolution you can get your hands on (that also support accurate colors, good contrast, and decent black level). The XGA projectors also have less visible pixel structure because at a given screen size you have a finer pixel grid.
David