When you start shopping for a projector, you’ll immediately notice that there are two main projector technologies on the market: Digital light processing (DLP) and liquid crystal display (LCD). Historically, DLP projectors boasted better contrast and black levels, while LCD projectors had better color saturation with less fan noise and lower operating temperatures. Because of improvements in both technologies, those historic differences have narrowed. Even Projector Central’s columnist Evan Powell, who used to discuss the remaining small differences in quality, admits, “home theater-oriented DLP projectors have closed the gap with LCD in the area of color saturation.” However, Powell says that LCD projectors still have a brightness advantage. But DLP projectors tend to be a bit smaller because the technology takes up less space. While it is certainly possible to spend $30,000.00 or more for an elite home-theater, reviews say many great performing HD projectors are now available at a fraction of that price. One example of is the Optoma HD72. This 720p ((1280×768 pixels) DLP projector has earned praise from all quarters for its combination of excellent performance and aggressive pricing. For example, Kevin Miller of Cnet.com calls the projector a “surprisingly good performer at a ridiculously low price.” Thanks to the use of the Texas Instruments (TI) Dark Chip2 (DMD) DLP Chips black levels are good, with Miller saying that very dark areas appear deep and rich. 
There are several unique benefits that are derived from DLP technology. One of the most obvious is small package size, a feature most relevant in the mobile presentation market. Since the DLP light engine consists of a single chip rather than three LCD panels, DLP projectors tend to be more compact. All of the current 3-pound mini-projectors on the market are DLPs. Most LCD projectors are five pounds and up. DLP consists of one single chip, instead of three bulky LCD panels, resulting in smaller projectors without any loss of image quality The smaller the better for size
Brighter and Sharper Contrast
Another DLP advantage is that it can produce higher contrast video with deeper black levels than you normally get on an LCD projector. DLP has ardent followers in the home theater world primarily due to this key advantage.
While both technologies have seen improvements in contrast in the past two years, DLP projectors still have a commanding lead over LCDs in this regard. Leading-edge LCD projectors like the Sony VPL-VW12HT is rated at 1000:1 contrast, and Sanyo’s PLV-70 is rated at 900:1. Meanwhile, the latest DLP products geared toward home theater like NEC’s HT1000 are rated as high as 3000:1. Less than two years ago the highest contrast ratings we had from DLP were in the range of 1200:1.
This boost in contrast is derived from Texas Instrument’s newer DLP chip designs, which increase the tilt of the mirrors from 10 degrees to 12 degrees, and features a black substrate under the mirrors. These changes produced a significant advance in contrast performance that simply did not exist before. Experts say DLP still has the upper-hand in black levels and contrast, therefore producing the most cinematic image.
Consistent Picture Quality ; Durability
A data projector based on DLP technology delivers knockout picture quality again and again because, being all-digital, it recreates its image source every time you use it. Unlike competing analog technologies such as LCD, the semiconductor that makes DLP projection possible is virtually immune to heat, humidity, vibration and other factors. Durability is very important to home users since replacement cost is high.
Cost Advantage due to Reduced Pixelation
Another competitive advantage of DLP over LCD is reduced pixelation. These days it is most relevant in the low priced, low resolution SVGA class of products. In SVGA resolution, DLP projectors have a muted pixel structure when viewed from a typical viewing distance. Conversely, most SVGA-resolution LCD projectors tend to have a more visible pixel grid. This is entirely irrelevant if you are using the projector for PowerPoint slide presentations. However, it is more problematic for a smooth video presentation. For this reason, we don’t normally recommend SVGA-resolution LCD projectors for home theater. Conversely, the revolutionary InFocus X1 is a DLP-based SVGA resolution projector. It is selling now for under $1,000 and is an incredible deal for the home theater enthusiast on a limited budget.
In XGA and higher resolution, DLP technology pretty much eliminates pixel visibility from a normal viewing distance. However, the latest WXGA resolution LCDs do so as well. So with higher resolutions, differences in pixelation are not the big competitive battleground they used to be. DLP continues to hold a small competitive edge, but the dramatic advantage of DLP over LCD no longer exists. The screendoor effect is receding into history as a problem of days gone by.
Versatile and More Reliable
DLP technology allows projectors to be small and light, often weighing as little as 2 lbs – making them versatile enough for use in conference rooms, living rooms and classrooms. Display systems using DLP technology are able to recreate their incoming source material with each projection, ensuring a full-impact projection experience that will not fade over time. 
When it comes to home theater, DLP has continued to make competitive advances in color, contrast, and image stability that have served to make it a technology preferred by many for home theater systems. But the fact is that both DLP and LCD continue to improve, and both are capable of delivering much higher quality video for home theater than they ever were before.  Which technology is the best? Well, it depends. Both technologies have advantages, and both have weaknesses. Neither one is perfect for everything. So the technology war continues. The only clear winner in sight is you, the consumer.
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DLP Technology… See how it Works.
Retrieved March 9, 2007; http://www.plus-america.com/papers.html
The Great Technology War: LCD vs. DLP
Retrieved March 9, 2007, http://www.projectorcentral.com/lcd_dlp.htm
Howstuffworks “Television Technologies”
Retrieved March 10, 2007, http://electronics.howstuffworks.com/projection-tv1.htm
DLP. . .See It! Shopping Tips
Retrieved March 10, 2007, http://www.primediahometech.com/dlpseeit/605shoppingtipsgearhead/