We tried our 360 rig with 5 of the gt700 and it worked OK but as you said all the games we tried don't generate a rear image (we will keep looking) we also need to make some good 360 media.
Yep, the difficulty is finding content. FSX will work, it just takes a bit of configuring. Also custom video would work, just need to sit down in Adobe CS5 and produce it. For a consumer projector the Optoma GT700 and GT720 are dirt cheap to buy. They don't have all the luxury settings on them but they do what is needed once you get the mounting locations right. I've never quite figured out Optoma's reasoning behind making both the GT700 and GT720. They have same price point, just seem to be sold though different retailers. As I understand it, the bulbs are only very slightly different and that's the only change.