Well this was crazy enough that I thought I would add my two cents. First off, its obvious that wuxga was misunderstanding several things. He kept saying something along the lines of "why not do it like OHPs?" As far as I know there is no practical difference between what we do and what is done in an overhead projector. In fact, may people use OHPs as their first projector.
Also, it appears that this concept that he has introduced of an "image circle" appears to be "irrelevant," to reuse his words. The reason why is that as the term is used in relation to a camera, it only references one image circle. I assume that this is because a camera is a "infinite/ finite conjugate system" as DAZZZLA has already said. In a projector system there are two image circles that are relevant to the focusing portion of the optics. There is the image circle at the LCD and the image circle at the projection screen. One of the image circles is frequently greater than 15" the other is frequently greater than 120"....
So, why is this possible with a projector but people that are familiar with photographic lenses give responses like, "A projection lens of 17" image circle at $200? OMG...."? Well, a photographic lens acts similarly to a pinhole lens (http://en.wikipedia.org/wiki/Photographic_lens). I haven't done a whole lot of research on exactly how they work since I'm not currently interested in photographic lenses, but the fact that they are similar to pinhole lenses suggests to me that they actually use the aperture as part of the focusing mechanism by narrowing the light cone. This would explain why they have a good field of depth. In any case, there is some formula that will dictate what size the image circle is (I'm guessing it a function of the field of view). I don't know what the details of that formula are, but I do know that they are very different from the formulas used in a projector. In a projector the magnification dictates the sizes of the image circles and is simply M=-S2/S1 (with the variables defined here: http://en.wikipedia.org/wiki/Lens_(optics)). For a typical projector, S2 is around 120" and S1 is around 14". That gives a magnification of about -8.6. Thus, a 15.4" "image circle" is turned into a 8.6*15.4 ~= 130" "image circle" on the screen. Actually, strictly speaking, the image circle at both locations will be larger than I indicated above since the field of view is larger than just the size of the LCD. However, we usually use various frames and the like as apertures to ensure that light only follows a path that goes through the LCD, so the effective image circle is as described above.
The lesson to learn is that projector and photographic lenses are different and they do different things. Much of the nomenclature can be interchanged but not all of it is a direct translation. You have to be careful about what is assumed in each system in order to make sure that you aren't misapplying a term.