Having used projectors since 2002, I've been a big fan. Primarily for the reason that it was the cheapest way to get a big screen!
More recently I've moved to a room with a a lot of ambient light and struggle with my Epson TW 3000 (US equivalent Epson 6100), reasonably similar to the 8350 in discussion here.
And now find myself asking the flat screen vs projector question quite seriously. A 60" plasma can be had for about Rs 1.15lk today, which is about the price you pay for a good projector. Throw in a new bulb over the next two years Rs 15k. Total cost of ownership is at about Rs 1.3lk, making the plasma a cheaper choice, albeit for 20-30" fewer inches.
Guess what, I said wtf and just went with my gut of buying a 60" plasma. Couldn't be happier. The ambient light just kills the perceived light output of a projector. Keep in mind I'm using a screen with a gain of 1, blackout cloth with a matte black frame (custom).
Bottom Line: A projector is great bang for the buck if you are able to control light or it will be your secondary tv. EPSON has been putting out great projectors for the past 3 years now and has succeeded the Panasonic's and Sanyo's of the past. Enjoy!
p.s. I do have a 1.5 year old Epson 6100 with brand new bulb, if somebody would like, PM me