The maker of the DIY Zune Projector admits “It doesn’t work well”, but I think it is a good starting point for something that might. It seemed to work better with bright animations rather than movies. Perhaps hacking a better light source?
Though it doesn’t work well it was an interesting experiment. I figure at the very least if it doesn’t work well it may as well look cool. It’s a pretty contraption at least. I may even find myself using it a bit if I can find a suitable projection surface that has hi gain.
Read more about the DIY: Zune Projector for $5
Make an iPod video projector