I have seen the Piano, which btw is already for sale here in the Netherlands, and i can tell this:
1) It looks *very* nice with PAL discs. (pj connected with s-video). Obviously, you lose some lines, but thanks to the excellent scaler/deinterlacer you don't really notice.
2) Sorry, haven't seen it. Personally i think i wouldn't bother watching analogue TV with a pj. (except of course for sports matchesd etc.) Ever tried to watch the News on a projectors. Those talking heads are scary

.
3) To bring out full colours and contrast you need to black out the room. (but that goes for every pj in my opinion)
4) Good points: size, weight, overall picture quality, low noise, the right tradeoffs chosen (for a "cheap"-ish pj) (ie: no zoom (gives a better image), low light output). Image is VERY sharp. Short throw. DVI (which is supposed to give a spectecularly sharp image). Very few problems reported (a few lamps that went at 500-600 hours). No need to fiddle with grey screens of filters. No screendoor at all at 2x screen width. Good Contrast. Relatively deep blacks (also thanks to the lowish light output). Excellent scaler/deinterlacer.
Bad points: slight rainbows, no VGA, motion artifacts (it had to be pointed out to me, but then I could see it clearly. It doesn't disturb me very much, but be sure you have seen al artifacts before buying the pj.), No zoom (makes placing more difficult). Power cable at the front is a bit awkward. No progressive input (not that you really need it) apart from DVI). Strange marketing concepts form Plus, though (reportedly) good service (at least in Germany). Short lamp life (1000hr), but lamp is relatively cheap at €300. Low light output, so the rooms really needs to be blacked out.
5) More about rainbows: the rainbows on the Piano are fewer and smaller, compared to data-grade projectors. In fact i saw them only occasionally. Unfortunately some movies are real rainbow generators because of the high contrast scenes. Pitch Black is a prime example. I can almost guarantee you'll see at least some rainbows in this movie. Then again i find them only slightly distracting. The motion artifact however, which is present in slow pans, have a longer duration, and are therefore a bit more distracting in the long run, i suspect. Though the effect is quite subtle, once you know where to look for, you'll see it when it's there.
In short... I'm going to buy a Piano in a month or so (unless something spectaculary better comes along, which is not bloody likely, i think)