The bulb problem is real, but also there for rear projection sets and those have been very popular. Front projectors are not TVs. They can't be kept on, just for company, in a bright room. They are home theater.
I don't think they are a secret myself and agree with the various posts, but Bob and gs nailed it if you ask me... I think there is a big misconception about them. As good as they can be, a projector isn't going to look like an HDTV or can be used as a TV and I think that's what some people expect. There certainly isn't anything wrong with watching cable or satellite programming on a projector, but it's not the same as a dedicated HDTV set, at least in my opinion.I don't wish to sidetrack this thread, but I found this interesting because it made me more aware of a line separating true (dedicated) home theaters (if I can use that description) versus setups that you can casually watch HD TV.
Projectors are a bit softer and more film like and some people just don't like that. They want the big bright over saturated look of TV and I know some that swear projectors look horrible by comparison. It's just a difference in viewing tastes to me.
Then the bulb issue... projectors eat bulbs much faster than RPTV's (CRT projector guys have it made in this area) plus as the bulb ages the picture brightness drops off, adding to the mind set that they are dimmer and more of a pain. We have a 55" SXRD HDTV in our living room as well as the 106" screen for the projector. For casual viewing or certain movies we use the 55" set, for big epic movies we use the projector.
I was seriously looking at the 70" JVC HDTV and possibly thinking of just dumping the projector altogether, but still liked the film like look and larger size the projector had to offer. I think we'll be seeing some 80" HDTV's at reasonable prices soon and that's going to have an impact on the projector market for sure... brighter more vibrant images, easier to install, ability to be watched any time...
Will HDTVs reach a size where it's a death call for projectors? Nah. Projectors will change in their uses and size will go even bigger. I can't wait for the technology that's coming that will reduce bulb prices or even eliminate the need for replacement altogether (laser projectors). The big HDTV may replace a projector in the living room, but that same projector may find a new home in the bedroom, or as an outdoor theater, pool theater... the possibilities are endless. Once place I never see HDTV replacing projectors though is in dedicated HT setups. There projectors are still king, but that's also what they were really made for, not just a 'big' TV.