I managed to construct a relatively large projection theater, by cutting corners, doing a little deal hunting, and making some things on my own. For under $500. Everything I have done can be scaled down for you on home, for either a temporary or permanent installation.
Step 1: Acquiring the projector
If you have a projector, you can skip this step.
Otherwise, there are a few ways to go about getting an LCD projector for about $300. Personally I got mine from a friend who was selling one, similar to the price of comparable models on ebay.
Another way is to check local computer junk stores, thrift stores, and flea markets.
Be weary of cheap projectors without bulbs, if you are handy (or can wait around for me to write up my instructable on it) you can improvise your own bulb for ~20.
I'm a little too lazy to cite sources but if you are adventurous you can build your own from scratch.
Also do some research to make sure your projector has enough power to fill your selected wall or screen with the ambient light of the room... check manufacturers specs for this.
so $100-$300 for the projector