Angelo,
I own an S2. I have also had experience with an Infocus 7200. My S2 projects a very satisfying high definition image with 1080i material (DirectTV). The S2 is capable of amazing three-dimensional displays with 720p DVD material as long as the transfer, focus, color saturation, etc.. is of a high quality. I also know that I can further improve contrast by darkening my walls (but wife will not allow), investing $450 on an ISF calibration, replacing the factory power cord with a better one, installing a dedicated power supply, etc.., You see, I wonder how many of us are using the S2 to its true capability.
IMHO, upgrading to an S3 would only make sense when higher resolution software becomes available (HD DVD?). until then I plan to invest a little more money working on optimizing the room and the infrastructure,
Of course, if I had to buy a new projector, I would start with the S3. I welcome the opinion of other S2 owners on this topic.