Rainbows can exist in a rear projection DLP based display. It's my understanding that most/all of these displays will be using 6 segment color wheels, so that effectively doubles the spin rate of three/four segment color wheels commonly used in business projectors. It's still possible to notice a rainbow with these wheels, but it should be less a problem.
Also, with a smaller screen the rainbow should be less visible.
Also, with a smaller screen the rainbow should be less visible.