Hmm, you got me thinking. What if one took a 50" rear-projection TV set (or even a modern flat panel) and mounted it horizontally in a hole like you had, and then laid a sheet of plexy over the whole thing. Viola, you have a gametable without the need for the projection system (which is noisy, hot, and has expensive bulbs).
You don't want an old style std res TV for this purpose. The resolution on it will be far too low at std TV res or even at SuperVHS resolution. This is just not what you want. Not even close. Pixel density matters for this application - and it matters a LOT. With a pixel density that is too low, your image on a per inch basis on the map degrades massively.
(Std TV looks as good as it does to the human eye because the image it displays is always moving. Freeze that image, and the image quality instantly becomes rather poor.)
In my opinion, you want XGA at 1024x768 or higher for tabletop projection. (Higher resolutions are too expensive right now, but at the current cost of XGA projectors, I wouldn't even
look at a 800x600 projector unless it was gift (or just STUPID cheap) let alone a standard res TV).
IMO, a battlemat and wet erase are preferable to std res TV.
For the price some folks are putting out there for these setups it seems one could obtain a flat panel.
Yes, but there are significant reasons why projection is handier in use.
The ability to optically focus the image to make images with hard-coded grids scale easily (optical scalability) is
very useful at the table. Less important, (but still handy) is the ability to project on top of 3d objects on the table top.
Moreover, the cost of projection technology is still far cheaper than flat panel displays.
In five years (probably less), I don't expect this to remain true and flat panel technology will take over.
The one Ace-in-the-hole is if pico stlye projectors brighten considerably. Samsung has a 1000 lumens ultra portable projector that is very promising due out this spring. Up that lumens ratio by a factor of 50-75% and reduce the size even further on the projector?
Extremely portable projection tech doth hath its gaming advantages. An Optima pocket projector with 50 or 100 lumens is a toy. If it has 1700-2000 Lumens? That's no longer a toy - that's
Coolest. Gaming Projector. Evar.