easy... panasonic AE900.... it's LCD, but has a dynamic iris to help compensate for the low contrast... blacks aren't spectacular compared to a DLP, but it's a true 720P and can be purchased in your range brand new with warranty after rebates.
Pros: LCD so no rainbow concerns, Micro lens array so there is virtually no pixelation unless you are really close up. It also has a lens shift type system so installation is a breeze. It also has a very wide range zoom lens and can be a pretty long throw. So you can likely set it on a shelf in the back of your room and still keep a reasonably small screen size.
Cons: typical LCD "issues" apply (organic panel so color uniformity is not perfect and will degrade over time, suffers from vertical banding but some units are better than others and the panny does allow you to kind of tune it out). The micro lens array basically blurs the edges of the pixels together so you don't see the "screendoor" effect, but the result is that the picture focus is a bit softer than competing models (some people prefer this as it looks more "filmlike" or "CRT like" to them... they're just used to seeing things out of focus
hehehe). It's not the brightest thing out there (~400 lumens with a new bulb when calibrated to D6500, less than that as soon as you put some time on the bulb). So you want to keep the screen size down unless you like a washed out picture
It also doesn't really do black exceptionally well (at least compared to a good DLP). But, if you haven't seen other models to compare, this unit is going to look absolutely fantastic....
The competing DLP models that have 720P resolution are going to run you >$2K. The DLP models in your price range are going to be 480P and 576P (although as more 1080P stuff is hitting the market, it is going to drive the 720P prices down further.. but if you are looking to buy today, this is the state of the market). This Panny allows you to sit closer to the screen than the DLPs in this price range because it has greater resolution and blurs the pixel structure.
hope that helps...