True, and we need to compare apples with apples, not oranges to apples. But there aren't any other apples out there! (who else offers customisability like this???)

I guess at the end of the day, the average consumer has to understand the value for what they're getting

Looking at the parts inside: (taken from the store prices)

Condensor : $15
Reflector :$15
Condesor and reflector holder $? (my guess $15)
240mm lens with sleeve :$40?
220/330mm Fresnel Kit as an example $35

Total so far: $120 for parts only

excl. fans and other small electrical parts

EBallast $130 (coil and core is cheaper but I don't know what's going in there)

So total is $250

I have no idea how much it costs to produce the metal enclosure but what I do know is that the cost is not simply the material. Factors such as electricity, time spent, delivery costs, outsourcing etc... must all be taken into account

And of course profit margin % markup on the enclosure (assuming markup already taken into account for the parts listed above)

Lets say I wanted to produce a 800x600 LCD out of this setup. "Competitors" are selling for about $500-$600, but without customasibilty and unknown warranty/feedback

Cheapest 800x600 8" LCD i can think of is the HAMI which goes for about $175 and it includes basic TV and VGA inputs (I'm sure CrazyChen could get a better deal even)

To keep this within price range (lets say $600): $600 - $250 (internals) - $175 ~ $200 for LCD leaves $175 to $150 USD "selling price" on the enclosure only and lamp (about 25USD) for consumer, and that includes markup.

Problem with this is

a) DIYPROJECTORKITS is not getting much markup on the enclosure if it's only $150, (however the do make the sales on all other optical parts which is good)

b) consumer goes out and buys a HAMI LCD, so sale is lost from DIYPROJECTORKITS in terms of the LCD - so DIYPROJECTORKITS should be very explicit when marketing in showing that they have the the available LCD/controller kits available at best prices as well!

So how do I believe that this should be approached? As a consumer, one usually wants to buy all his/her parts at once from the same store.
I believe the enclosure should be cheap as possible (a cheap enclosure would be the attractive part, kinda like bait ), and get sales off the LCD & controller that consumer buys with the enclosure.
Car sales work just like this

" Wow, a brand new BMW for only $10000"
"Yes Sir, only $10 000. You'll take it?"
"Yes I will"
"Excellent. Sir would you like a steering wheel for your car? That will be $3000. Oh, and might I suggest you install seating for the inside, $5000 USD..."

I'm exaggerating above but you get the idea

The ACE in the sleeve will most likely be the plasma bulb. because that truly does stand up against commercial projectors in terms of brightness and against DIY in terms of longevity, and it can be upgradable from standard setup.

That's my two cents!