For Blu-ray the projector needs to have hdmi or dvi input that is hdcp compliant and able to accept the resolution.
4:3 XGA resolution is ideal for pal dvd anamorphic widescreen films 576x1024 and well suited for downscaled Blu-ray particulary if it can scale to 540x960.
Pal dvd is 576 lines x 720 samples resolution. But dvd was designed for crt it is stored interlaced and heavily filtered horizontally and vertically, to reduce interlaced line twitter on interlaced displays (any details one line wide flicker on and off at half the crt refresh rate, as the crt draws odd lines then draws even lines, etc..) and bit-rates. Super-bit dvds are filtered less horizontally than other dvds, but the only time you will usually see a dvd with its full potential resolution will be a calibration disc test screen. Film dvds typically only claim >500 lines resolution (also crts usually only display about 711 samples per line so the whole 720 samples may not be used for picture information on some dvds so displaying with zero overscan you sometimes get narrow black bars on left and right sides). The filtering also rolls off frequency response so fine details will lack contrast. Colour is stored on the dvd subsampled at half the horizontal and vertical resolution (360x288) of the lumanince resolution, the player then interpolates it back up to the luminance resolution. On a XGA projector the dvd needs to interpolate the colour, de-interlace, upscale (720 samples to 1024 pixels). If you are using component outputs rather than hdmi, the output video dac filters may also be rolling off high frequency response, and the pixel phase maybe out, both of these will further reduce fine detail contrast/resolution. If using component video output you would probably benefit from using a dvd player with a high bit dac, like a 12-bit dac, since the dac creates the analogue waveform the projector is sampling.
Blu-ray is 1080P 1080 lines x 1920 pixels luminace resolution. 540x960 is the colour resolution of 1080P Blu-ray which like dvd is interpolated up to the luminace resolution. Conected to an XGA projector you will get more detail in the image than with dvd but more noticeably the frequency response will be higher longer, for better contrast in middle and fine details even when downscaled to XGA. So the image will look sharper and more detailed, colour may also look better with higher colour saturation in fine details. A sharper image looks more infocus, which may improve apparant depth of field and so slightly improve apparant image depth/3D effect/pop. The picture is down scaled 1080 lines to 576 lines, and 1920 pixels to 1024 pixels, so it depends partly on how good the scaling is, downscaling is generally better than upscaling (softens the image less). But going to 540 lines and 960 pixels should give a better picture as it is easier to scale. Some XGA projectors like my Mitsubishi projector have virtual lens shift screen size, which reduces the number of pixels used to display the image. On my projector virtual lens shift screen size 2 makes the picture 540x960 pixels.
A possible disadvantage to Blu-ray is that 50Hz pal dvd uses 2:2 pull down for no uneven added motion judder. Blu-ray 60Hz uses 3:2 pull down which adds uneven motion judder. Americans are used to this and have lived with it for years, and some people do not even notice it but others find it anoying. If the projector will accept 24fps input you avoid the uneven motion judder.