If you can afford the 1024x768 projector, or even a 1280x720 or 1366x768 projector then go for it. Of course, the more pixels/resolution, the less likely the pixel structure will be able to be seen and you will be better equipped when you feed it a high def image. What is your budget?
One other thing to add to Neil's post (which is spot on, BTW). 800x600 is not enough to fully resolve DVD's. DVD's are 720x480 natively, in a 16:9 format. Because digital projectors have square pixels, this translates to about 854x480. In all fairness, those 54 pixels or so aren't a deal breaker to everyone, but it is an issue to some.