Hi
yes look at the Sanyo Z3 which is LCD or EPSON TW10H which is LCD and about £660. For DLP i cant recommend highly enough the Themescene H30 which is outstanding value and a cracking picture and can be found for under 1K now. You must demo this model.
The panny 700 has had very good reviews with only a few people having problems with colour banding which is a horrible stripey effect on screen. High def is said to look excellent though. If the DLP rainbow effect is not a problem for you try it first. Watch a complete movie at your demo not 20 mins only and pick a natural film not a CGI Film. something like Pirates of the Carribean...
If you intend to keep the pj for a few years a higher resolution pj might be more future proof as sky intent to supply a hidef service in 2006. Most people end up upgrading however each year.....
Hope that helps
CH
ps. sorry, yes the pj will take care of prog scan