You can. And it is fine. There are some new sub-$1000 projectors out that are very good. The two most popular low cost contenders are the InFocus X1 and the BenQ PB-6100. Both are 800x600 and use DLP chips for the display. Both are about $1000. The X1 has been the internet favorite for the last 9-12 months or so, but the BenQ has recently gained in popularity. Both have bulb lives of I think 3,000-4,000 hours. (that's a lot of TV watching) IE if you watch 4 hours of TV a day, every single day, you're still looking at 3-4 years of use before you have to replace the bulb. Bulbs are a couple hundred $.
Do some research and some reading over on
www.avsforum.com and you'll find out lots of info.
I just bought the BenQ, and I have to say the picture for watching DVDs and playing Xbox is absolutely incredible. I'm projecting a 50" screen - it looks great, and I have no problem with brightness in a medium-dark room. Most people are projecting 70-80-90" screens which I imagine is equally stunning, but probably not quite as bright. My directv signal on it looks okay, but not fantastic - the big problem being that the high resolution of the projector makes the signal defects stand out. Don't get me wrong, it is very watchable - but definitely doesn't compare to DVD or another hidef source.
Unfortunately for me, the asthetics of using the projector in my living room just aren't working out - the screen looks silly and is ruining all my good feng-shui.

And I don't have an extra room to make into a dedicated theater room.

So, I'll be selling this guy with about ~20 hours on the bulb. (hey, I had to watch a few movies). Let me know if you might be interested - the projector was $970 shipped to my door, there is a $100 rebate that I may or may not get (as with all rebates) and I dropped about $20 on a DIY ceiling mount at home depot. I'd sell the set for $825 and split shipping with you.