I'm not sure about going from 720p to 1080p. The default setting is 1080p. I'm not sure how I would get it to 720p or even why it would need 720p. I'm also not sure what the screen would have to do with it either. If you mean my projector... the main menu and the one BD I played worked fine, so the projector doesn't have any issues. I'm not sure how the PS3 would be too fast for any projector anyway.
This is only a problem with I'm in the settings menu... nowhere else.