Ok, so I completely forgot about this thread which is why I haven't replied. I basically did the exact same thing your looking to do and had some of the same questions you do now.
I went from 47" LCD tv setup to a 92" projector setup. In my case my setup is a fixed 92" AT grey screen with a Benq W1070. Basically the exact setup your looking do, same projector and all!!! Let me start off by saying I have had this setup for almost a year now and I have really enjoyed it *despite its shortcomings*. Yes, as with everything you have trade-off's and this is no different, in this case those trade-off's result in a big a$$ screen
You have to decide wether its worth it or not for you.
As you eluded to not being able to make it dark all the time and having ambient light coming in to your area where the PJ will be... I have the same issue. In-fact I have two windows facing the screen, lol (worst case scenario pretty much). But I have found way's to mange the ambient light and balance things so that I can have some ambient light in the room while maintaining a nice level of picture quality (PQ from now on). First thing I did (and keep in mind these were my choices I made based on what I read, researched and saw on the net) was get a grey screen to help in boos perceived contrast and black levels to counter-act the ambient light that was going to be in the room. This has helped IMO a ton. Second thing I have done is I got a floor lamp with two directional head's on it. This may sound kinda' messed up but I actually like having light in the room when Im watching stuff unless Im trying to create a cinematic experience. So think sports, citcom's, etc.... I like to actually have the light on. The directional head floor lamp has allowed me to face the light towards the opposite corner of the room (dimmer bulb I might add though) from the screen and bounce light back into the room. By doing this I have light in the room and the PQ is maintained to I would say around about 80% of what you would get as if it were pitch dark. When I have day time ambient light I keep the room lights off and just simply face the blinds upwards towards the ceiling so that light pour's in but falls off as much as possible in the direction of the screen. I won't lie, on bright sunny day's my blinds are almost shut.
As you can see there is a trade-off there with the ambient light above and a PJ setup. You have to be able to live with this or this setup will be a fail for you. Now if you have windows that aren't directly facing your screen wall that will help a ton Im sure but you will still be faced with similar dilemma as above just not as bad as I have it.
Now to your concern of watching "lower quality" content on the PJ setup. I won't lie.... the PJ magnifies the problems with low quality content. Is it watchable? Yes, most of the time. Ill explain.... on lower quality content, say 480p or less I find that my eyes are willing to watch most things just fine but when "darker" scene's come up thats when the lower quality content start's to look like crap. No sugarcoating it. Dark scenes on LQ content looks like crap. In my time with my PJ setup I have found most content to be "acceptable" for me. Depending on how much content you watch in lower quality and personal level of acceptance to your eyes this is a personal decision that sadly you will have to find out first hand. My personal opinion.... Im ok to watch anything 480p or higher just fine... anything lower and I don't like it. I watch sports broadcast's with the lights full on and have no issues with the PQ I get.
Now on to screen size relative to space.... Im sitting about 11 feet away from the screen and the screen is perfect to me. I don't think I would go bigger at this distance but again.... personal preference.
The BenQ W1070 is a light cannon of a PJ. Seriously. It combats ambient light as good as any PJ out there and the PQ is something serious awesome IMO for the price. If you do turn out the lights.... its just amazing watching movies and 1080p content on it. And even with the lights on at around that 80% (my really ghetto guessing technique is where i got that #) it looks really-really good. I don't like 3D and don't care for it one bit... but just to test it the once to make sure it works I put in John Carter with some 3D glasses I bought from eBay for $30 and it seemed work pretty damn good. Rivalled any 3D content I have ever seen in theatre at the Cineplex's here in Canada. No aliasing issues I could see to my eyes. And the brightness for 3D was enough too. Oh and if your a gamer..... great response time from the PJ.
No issues with lag gaming online in my personal experience.
And lastly, the never ending talk on forums about black levels on PJ's.... seriously effing' blown out of proportion. Now I didn't come from any kind of reference level plasma panel with insane black levels more rather just a normal consumer LCD tv and the black levels have been just fine for my personal self with this PJ. Sure, they suffer when you turn the lights on but then everything does with the lights on to a degree. I love the TDK Trilogy which are dark as **** and no complaints here. Tron Legacy... pretty dark movie... again no complaints on the black levels here. Oh and this PJ has pretty damn solid colours out of the box if you choose not to calibrate at all. Not something all PJ's can claim.
There is more I would like to say about all this but nothing more is coming out of my brain, lol. For me when I did the switch and forked out the coin (to me it was a lot of money) I was really nervous with no prior experience and in the end it worked out fine and I have been happy with it. Are there trade-off's like I said? Yes, absolutely. You have to adjust to the setup (mostly ambient light) and be willing to live with those trade-offs or you will be unhappy.
Ask any questions you like..... (and please excuse the surely poor grammar and spelling... was trying to get my thoughts out and into text as fast as possible!).
can't wait for your input! I've actually been thinking about this setup and doing some research and I think now I might want to avoid the AT screen... Not sure tho...
(AT and electric). I know I can't afford the best screen and will have to compromise a little there... But I'll be thinking of the screen as temporary anyway since I'll likely get a fixed screen when we eventually buy a house. 
