I used to be a big fan of LCD rear projection and disliked DLP rear projection. I have since flip flopped.
LCD struggles with fast motion like a golf ball being hit or football being thrown. The screen door effect on LCD's can be very prevelant during certain types of programming. DLP's black levels tend to be better as well. And, yes, some people can see a rainbow effect in a DLP set. However, that is extremely rare.
I like the new Sony's too (SXRD technology), but typically recommend the DLP's to my customers. They are considerably less money than the SXRD Sony and the picture on them is very very good.
1080P is really only going to be helpful with screens 55" and bigger. That's where you will need the 1080P to see a sharper picture. Smaller than that, I would recommend a 720P or 1080i model because a smaller TV can't display a better picture. I have attended many hours of training with manufactures and manufacturers reps from companies like Vidikron, Samsung, JVC, and several others. The general consensus is 55" and up you will begin to see a difference with 1080P.
Samsung and Toshiba make some really fine DLP TV's that I would recommend. Many people feel that the Sony SXRD models are an excellent choice it's just that I think that just as good can be had for less money.