Nonsense!
If you feel like you can do in-ceiling lighting then you can do a projector on the ceiling.
If you are here doing some research, then you have already done the first step in doing a home theater with a front projection system.
If you look at your wall and your basement and go - I have curtains, but what really would look good on that 8 foot wide wall is a 92" screen with HD being shown on it with my curtains that open up - then you are ready.
The hard part is deciding what to buy - that is what you have to live with. But, if you can get wires to your ceiling from an A/V receiver and power - then the rest is a few screws and a tape measure. Really, I live in an apartment and while I didn't hide all the wires in my family room, I did have my projector and screen up in about 2 hours.
The nice thing about modern projectors is that you can actually set everything up before hand and see how it all looks, then put it up after measuring five times. I actually put my projector on top of a ladder upside down - just like I was going to have it from the ceiling - in the EXACT location it ended up being hung. I didn't know what I was doing, but I had a general idea and did some research.
If you feel like that is what you WANT to do and your room is light controlled and ideal for a front projection system, then it provides one of the best images you can see - with almost every projector in your budget being 1280x720 pixels native HD (720p).
There are sections on this site about people who have done their own theaters, there is a ton of info, and if you have questions, then feel free to ask... Also, check
www.projectorcentral.com for some detailed info on almost every projector on the market these days and some good additional info.
1 screen - takes about 2 hours to install yourself with a little help when putting it up.
1 projector - takes about 2 horus to install as well - can do yourself.
6 pieces of coax to the projector (or 11) - 1 for composite, 2 for S-video, and 3 for component... If you want to hook a PC up, that's the other 5 cables (RGBHV).
1 power wire to the projector... for power - easy to run if you are installing ceiling lighting
I would add 1 piece of CAT-5 in case you want to add control or a 12 volt trigger of some sort later on.
You really seem to be going all out in the room, don't discount an idea because it seems hard, ask some questions and have confidence in your abilities - especially if it sounds like something you WANT to do.
If you prefer the idea of a 42" - 50" screen, then go that route.
I will be happy to post some pics of my setup in my apartment, which is not to pretty, but works until my house is done if you want to see how simple things can be.