Withdraw
Well the cost is going to be more then 1 lac, as their will be 5.1 speakers, bare minimum acoustics, recurring cost to source hd movies, etc. Further if something major goes wrong with projector etc, you know how electronics are, though such possibilities are rare, so we need to factor such situations. While there are cheaper projectors and screens, but you are aware that quality level etc will drop, instead of getting into this aspect, you are better off with your great TV.
If you love movies a lot then it is alright in spending money even if the budget is on tighter level, i would not care a inch for friends on this, as far as family goes, if they have also spent some large money in form of gold etc, then you also have the auto privilege of spending.
I think spending on house improvement is fine, but i would focus very low on holiday spending, because at end of the day it is just memories while if you buy something solid, at least it is there with you.
On the other hand a 50 inch 720p, is also a great entertainment and you are right that you can review your priorities next year or so, i like your honesty.
V.
