It doesn't for me. The image will be bigger than your normal TV, but your normal TV is designed for video and will provide more accurate color, far better black levels, and since it is CRT, it will be really tough to be on all around performance.
Plus, if you are building new, then take a few hours to look around
http://www.projectorcentral.com and read the AVS Forums.
Don't get me wrong - I'm NOT a videophile. I am a user - I have my setup to enjoy it and I do not spend hours tweaking it. What I call issues really are items that detract from me having fun. A poor image, light leaking from the case... a fan that is noisy during the film. Colors that just look wrong.
If you examine your budget, and your selection of projectors that are available, there is a solution that does both. Gives you great video and also is affordable.
I also ONLY recommend 16:9 projectors. I go into detail on this at Projector Central, but the bottom line is that with a 16:9 screen the largest image (16:9) will be your highest quality sources. HDTV and DVD. Many DVDs are 2.35:1 which use less of the screen, and regular TV is 4:3 (1.33:1) which will use the least amount of the screen. Thus, your worst image, is the smallest, which makes it appear nicer looking.
The overall value - the package - improves dramatically. You end up with a screen designed for the display of HD content, your projector shows HD content the best and you step down in size as things get worse. You get the deepest blacks possible and the best imaging processing possible and are ready for future formats such as HD discs and HD gaming.
What choices do you have?
InFocus SP4805 - About $1,000 - 853x480 sometimes refurbs as low as $500
Optoma H31 or H27 - About $1,000 - comparible to SP4805
Sanyo PLV-Z3 - About $1,300 - Full 1280x720 HD resolution - best bang for the buck in my opinion
Panny AE700 - About $1,500 - Probably the best selling projector last year. Great when you can do the AE900. Some consider it better than the AE900.
Panny AE900 or Sanyo Z4 - or list of others - About $2,000 - Newest LCD projectors on the market with performance that some consider better than current HD home theater DLP projectors. Well worth the money, but perhaps not when the AE700 and Z3 are still out there.
Bottom line is that you should not expect a projector to be BETTER than your current TV. It will be MUCH bigger, but you will definitely notice the loss in quality vs. your current TV and vs. other displays you see every day. People are more in tune to these things than they realize, especially when it is in their home and they can see it compared to their other displays.