For 2K, I'd see if I could find a used LT-150 and see if Thumper has time to mod it. Then do the $99 VB50 until I had time and budget to build a low end HTPC.
There's really no comparison between 36" and 60"+. There's a lot of downsides to a FP (mostly dealing with initial setup, light control and cost of ownership) but my el cheapo 92" rig (under $5K) gives me enough theater experience to make my 35" TV a dust collector.
PLUS UP-1100 - Thumperized (about $3K)
Da-Lite 92" Screen (about $500)
ISCO II ($950)
You could easily live without a screen and the ISCO and you'll pay less for your projector than I did for mine.
TIVO (at High quality) + the VB50 (in sport mode) looks decent but not awesome except for size. Yes, you will see every image defect blown up to gargantuan size. Yep, it can be annoying if you care. But cable around here is kinda fuzzy anyway. Good enough for superbowl parties but for any sort of critical viewing...which you're not likely to be doing on P&S HBO movies anyway (or for that matter on a 36" XBR).
You might find your viewing habits changing too. I know that with my older 35" TV I was 50-50 in watching Cable vs DVDs. Now, I'm more 90-10 in favor of DVDs simply because cable movies are P&S, widescreen isn't as small at 92" vs 35" and TIVO+Comcast = fuzzy even at 35" except for the movie channels.