We used the adapter to project a few movies from an iPhone and the picture quality was the same as what we experienced projecting content from a laptop. The big difference is an iPhone is much smaller than a laptop and the whole package is quite compact and road friendly. Again, though the picture quality isn't great, kids do seem to love having a movie projected on the wall rather than watching it on an iPhone or iPod Touch's screen (or a laptop screen for that matter).
We've seen a few other pico projectors in action and the image quality, particularly in terms of brightness, is similar for all of them. However, we did have a Wow Wee Cinemin projector, which ships with an Apple adapter, on hand for comparison purposes. Though the Cinemin offers lower resolution (480x320 pixels compared with the MPro120's 640x480 pixels), is only rated at 8 lumens for brightness, and its battery life isn't as good, we found the Cinemin's picture to be slightly better, with slightly deeper blacks (the Cinemin uses DLP technology). The MPro's picture was a tad sharper but we liked the color better on the Cinemin. It's also worth noting that to get the picture to display correctly we had to set our iPhone to display in wide screen for the Cinemin and 4:3 for the MPro120.
Before we get to a conclusion, let's quickly talk sound because it is an issue with these miniature projectors. This model has a couple of half-watt speakers integrated into the unit and that provides enough sound to watch a movie (you have to sit close to the projector), but as you might expect from such tiny speakers, the sound isn't all that loud or good (it is slightly better than what you get from your iPhone's speakers). If you want to augment the sound, you'll have to connect better speakers to your audio source (or use of the one's on your laptop, if they're powerful enough).
Summing up, there's a lot to like about the 3M MPro120. It's very compact, offers significant improvements over the MPro 110, and projects a passable image so long as you don't blow it up too much.
That said, you just can't expect these types of miniature projectors to perform as well as a laptop screen or larger, less portable units that cost more and cast a brighter image. As it is, the MPro120 costs around $300 (without the Apple adapter), which compares favorably with the price of other pico projectors. However, the technology is advancing and we expect that next-generation models will not only improve but come down in price. Case in point: 3M has already announced a successor, the MPro150. That 2010 model will cost $395 and adds 1GB internal memory, a microSD card slot, and a USB input for transferring files from a laptop or Netbook, letting you run entire presentations from the projector itself. Anyone interested in the MPro120 should probably wait for that model--at the very least, it should mean lower prices on the 120.