projectors make poor general purpose pc displays. Dont think you'd get a good HD projector at £500, and also your not really getting more real estate, your getting a supersized fairly low resolution screen which is a pain!
Only adding this as I use a projecotor, LCD tv and LCD monitor - in case anyone else thinks about following this path!
Have to disagree.......hehe
I use a projector almost exclusively now as my computer monitor.....
I have a small 19in widescreen monitor i use for TV viewing during daytime or when i'm on the computer, it rarely see action as the computer monitor though, normally only if i need to email during the day and its too long to do on my MDA Compact PDA.....
however the projector (1280x720 Infocus 7205) rocks! whilst you dont get more pixel real estate, you do get more room because you can run 4 windows minimised and still read them! its easy on the eyes becase you are not stuck right up against it and it isnt backlit.......you can obviously enjoy games or video far more than you can on a little monitor......its better if you have friends over too as you can all see the screen without having to crowd around a desk.....viewing angle is far superior usually too.....
only real downside is you cant view it in total daylight....but pull a curtain halfway and you can view data (ie surf) or pull curtains across completely and you can game or probably watch a movie, but movies admittedly are best in total darkness....
oh and if you use it a lot then you'll probably have to replace the bulb every couple years....which are not exactly cheap, but then people often end up replacing their LCD every few years because something goes kaput....not everyone granted, but how do you know its not you next
seriously though, if you hunt around, brand new you can get 1280x720 for £700 in LCD form, or second hand a fair bit cheaper.......
if you use a low res projector thats very cheap then yes it can be a bit crap compared to a similar priced monitor......but at 1280x720 or above, if you keep the screen size to around 70-90 inches and sit say 10ft back from it or more, it looks perfectly reasonable, easy to use and tbh a lot more fun
(last example, much easier to see peoples avatars...lol)