Get as much resolution and as many Lumens as you can afford. Also, check the lens' throw to make sure it's appropriate for your room (my boss made us get a mondo projector for the training room at work - the lens really wants to be 40' back - the cabling didn't lend itself to that, so we really can't zoom it as large as the screen from as close to the screen as the projector ended up mounted).
If your wall is pretty flat and smooth, I think you can by some paint that is meant for projecting on...but a real screen with stretchers to keep it tight will make it better.
With big flatscreen LEDs getting so affordable, are you sure you don't just want to get a big ol' flatscreen?
Remember, if your projector bulb burns out (usually rated for about 500 hours), the replacement bulbs run close to what a new projector costs (about $500, last I checked on one).
I've had pretty good luck with Optoma projectors for work (for doing presentations, etc.)
If you do it, go for a ceiling mount so it's up and out of the way! Also, I think HDMI cables can run longer than VGA, etc. without some sort of signal booster/amplifier.