I had the same dilemma back in October last year. I opted for the AE300 as in my opinion the Panasonic looked more 'video' and less 'data', if you know what I mean.
However, if I was buying today, I would probably go for the AE500 as it is the newer, higher resolution, better contrast design and I'm sure as the weeks pass, the AE500 will be at a similar price point to the AE300 anyway. It all depends upon how much you want to pay and how cheap you can find the AE300 in relation to the AE500. Look for at least £200-£300 difference.
I am very pleased with my AE300, it has always impressed friends and family alike. It really does show up poor sources and just how good excellent discs can really look! Results with VHS are also passable, it depends how critical you are.
One word of warning, the contrast on any projector will never be as good as a TV, however certain scenes in a bright colourful disc such as any of the Bond films, will often appear darker than reality. However dark areas such as the black bars on a 2.35:1 ratio film will appear more grey than black. However as you are probably aware, the image as a whole actually looks more convincing than you think!
If it is your first projector, I'm sure you will be very pleased, especially if you are moving up from a widescreen TV.