Console's would damage a rear-projection TV by causing 'burn in'.. ie; some icon is on screen in the same position for so long it actually etches itself on to the refractive media of the 'screen', thus, ruining it... TV's in general can do this.. #### look at an old pacman arcade game, bet you can see the maze even with power off..
But, computer media projecters are specifically designed to avoid this, or at the least minimize it. I mean, they're designed to sit and show the windows desktop for the duration of a 3 hour demo session. Burn-in isn't an issue. Provided you can afford one, it'd be fine.
We own 2 where I work.. On fridays, we've been known to hijack one and attach it to a DVD-enabled laptop to watch movies, and I actually hooked my xbox up to one of em one fine saturday when I came in to work 'extra hours'.. 6 foot high DOA3 rocks..
Alot of home theatres are being installed based around these things.. They're pricey as ####, a bulb for a good one can run 600 bucks.. But the price is less prohibitave than say a wide screen plasma display or other type of giant ass tv..
My future home-theatre plans include a projector.. They just plain rock.. And the room doesnt have to be totally dark.. how dark it has to be depends on the reflectivity of the surface you're projecting on (btw, they have special phosphorous-laden paints for this purpose) and how bright the projector is..
Bottom line: Works great, even if the price is wasteful for just home-console use.. (plus too hard on the eyes for extended play sessions, IMO)