This has been covered before and I'm sure a simple browse through the last months threads will reveal a lot of info, but here goes
Everyone will tell you to demo them both and see which one you prefer, there is no right and wrong, just personal preference. The ae500 seems to have more issues with vertical banding, the z2 seems to have more issues with dust blobs. Most people who have the Z2 say the lens shift is a wonderful feature and it is because of the lens shift that I will be buying a Z2. It makes the positioning of the PJ easier and in my case more wife friendly.
Since the AE500 has got a bit of a bashing of late, I must say that having used it for over 2 weeks now I am really pleased with it.
The unit itself is small, sleak and looks great. Its very quiet even in high lamp mode, and a whisper in low. There are hundreds of things you can tweak for the numerous inputs it has, and I am not even including the "secret" menu.
The picture is very very good, there isn't a trace of chicken wire, VB is very minimal (on my model) if at all visible and has an impressive short throw. Dark scenes are reasonable and lighter scenes look great. Get a decent source to this projector and you wont be disappointed. I have tried a direct link with my PC and it is a very sharp image. I haven't got the room completly blacked and it still produces a vivid source. Obviously it is more impressive with lights off, windows covered on a dark night
I haven't seen the Z2 going, and I would suggest seeing both (side by side if possible), but I don't think you would honestly be disappointed with either.
If the position of the projector makes any difference then it is worth while checking out the throw distance calcs on www.projectorcentral.com for me I found out i could have the Z2 a foot further away from the screen than the panny, this made a world of difference for me (it meant either the panny right above the sofa in full view or the Z2 a ft behind it hidden more.)
i to Which one.. Z2 or AE500 ? up grade from my ae300 and i got the h30 dlp it's impressive.
Overall better blacks. and brilliant colours.and i see no Rainbows
neither will do well in daylight. The Z2 I can tell you for certain will not look good at all (when calibrated- most people cant do this properly). At factory preset the Z2 would almost be watchable in medium light