When I first saw Sony's PJ series of camcorders, with their built-in projectors, I flashed back to all the times I sat waiting for certain friends of mine to hook up their various devices to the TV in order to share their vacation videos. They eventually just left the necessary cables hanging off the TV, but for a lot of people, that's a suboptimal solution. The small projector in the Sony Handycam HDR-PJ10 is a far more elegant option.
Essentially the same camcorder as the Sony Handycam CX160, the HDR-PJ10 gets its usefulness quotient increased quite a bit by a pico projector. (Much of this review is based on that of the CX130/CX160.) In part because the just-OK video quality matters a lot less when you're viewing it via the projector, and I'm assuming that if you bought this model it's because you're going to be projecting rather than connecting to a TV.
In sunlight, with the subject filling the frame, the camcorder produces good-looking video that passes for full HD. But in many other circumstances, especially when there's a lot of background detail and motion such as grass or trees waving in the breeze, the low-resolution (in this case, less than the native 2.07 megapixels required for HD) sensor simply isn't up to the task of resolving all that and you'll start to see artifacts from the interpolation and video compression, despite the relatively high bit rates.
As with the CX130/CX160, the colors look pleasing and sufficiently saturated, if a bit coolly white-balanced, and while bright highlights get blown out, that's an acceptable trade-off for the price that most people probably won't mind. Moderately low-light video looks decent, albeit a bit soft and noisy, and in very dim living-room light, the camcorder trades off color for visibility and sharpness, producing usable video with a not-unpleasant graininess reminiscent of black-and-white.
While the still photos are serviceable, you probably don't want to count on the camcorder as a camera. Photos are bright and colorful, but have that smeary, processed look of a cheap digital camera because they're scaled up from the native resolution of 1.67MP to 1.9MP.