Projectors are awesome and I am, thusfar, extremely happy with my PN64D7000 Samsung plasma. I still think I will end up moving the plasma to the basement and ending up with the 80" Sharp in the family room, but that's at least a year out.
The number one complaint of TV buyers: They wish they had bought a larger display.
At 12' viewing, having at least a 60" display is not at all unreasonable. It is shockingly amazing how quickly people get used to a 50" display after having a 27" display for years and thining that was enough. That's why getting the right size for your viewing distance is so important. Even moreso now as broadcasters are starting to use the resolution they have available to them.
Oh, and I'm free to talk about upgrading to a larger TV because I currently have a Velodyne HGS18 subwoofer which I think I would only replace with a DD18+ or a DD1812 - which isn't about to happen in the home I'm currently in. So, a good subwoofer is never an unreasonable thing to put into a system, but I did that early on so as to not be bothered by it again. Keep your eye on Audiogon for a good used subwoofer. People are constantly getting rid of excellent audio product there for half of the cost of new.
I'm at 12' and 106" and feel it's perfect. I agree with going big. The main thing is that when people hear 70" and 80", a lot think it's a linear increase...but the surface area difference becomes really significant with a diagonal measurement. Also with a lot of movies being shot in very wide aspect ratios, the actual image size goes down a lot. So, it's really a good idea to go big.
I just put a 70" sharp in the living room and like it, but only because the 80' wouldn't fit on the wall.
Viewing distance in there is like 16-18' though, so, the screen still seems very tiny compared to my home theater. Movies on the 70 aren't that immersive (even with the 3D on hehe), but, the upside is my living room has so much ambient light during the day a projector wouldn't work.
As far as the subwoofer, what's your current audio setup now? (speakers, sub(s), processor, etc.)