It really depends on what distance you're viewing from. A 720p projector isn't bad at all even by today's standards if you want a 110"+ screen, the big issue is pixel size on low resolution projectors. If you sit too close to a 720p projector, you'll notice. The other issue is lamp brightness where you want as many Lumens as you can get unless you've got yourself an every day bat cave, most home theatre projectors have fairly low Lumens though and are not designed for daylight usage. I use a 720p data projector at home, it's not bad at all, but I don't expect outstanding quality either.
For your money you should be able to get a 1080p projector with 3D but the quality will be another matter. Have a look on a specialised AVS forum, I use
http://www.stereo.net.au/forums/ in Australia, MacRumors wont have a lot of users with the kind of specific knowledge you're looking for.
and my budget is roughly similar to the OP. Am in the UK but I guess the hardware is much the same.