First let's understand the issue, and its cause, and look at how it can be corrected. Long before variable optical lens shift started appearing on all but large expensive projectors, manufacturers added "Digital Keystone Correction", to alliviate the problem.
Keystoning, and what causes it
Under normal circumstances, a projector, when set up, will create a "perfectly" rectangular image from only one angle, relative to the projector screen. We all have been in rooms with overhead projectors in use, and recall that the image is always much wider at the top than the bottom, that trapizoidal shape is usually referred to as Keystoning.
Let's start with why that happens. A projector typically sits on a table so that its lens is about even (or slightly below) the bottom of the screen. Since the distance to the top left and right corners of the screen is farther from the lens than the bottom left and right corners, the image spreads out more. The result, a wide image at the top, and a narrow one at the bottom.
I'm going to try to explain, but this will get confusing, best of luck!
Many projector shoppers (both business projectors and home theater projectors) have been aware of Digital Keystone Correction which allows you to project a rectangular image instead of a keystoned image. This is accomplished by using a "compression "compression technology" to modify the image, so that the top line of pixels isn't fully utilized.
Click here to enlarge. So close.
Let's say that on our theoretical image the image is 100 inches wide at the top, and 80 inches wide at the bottom. Then we want all our data only to use 80% of the top line, so that all the data is displayed in the center 80 of the 100 inches.. Let's use an SVGA projector as an example. With resolution of 800 (wide) by 600 (high) pixels, all 800 pixels are used on the bottom line to create the projector image 80 inches wide, but, to keep the image rectangular, it also needs to be 80" wide at the top. The solution is to only use the center 80 inches. And that works out to only using 80% of the 800 available pixels.
That means the projector has to sample all 100 inches of data (800 pixels) and cram it into only 80 inches, which is 640 pixels. The projector manufacturers use compression technology to do this.
However, further down from the top of the projector screen - let's say half way down, the image would be 90 inches wide without compression and again we need only 80 inches to stay rectangular. The result, the compression algorithm works to reduce the number of pixels used to (once again), be only 80 inches wide.
The problem is that you have, say, 800 pieces of data, and you need to display it with only 640 pixels at the top, and 720 pixels in the middle. The result of digital keystone correction is getting the rectangular image as desired, but the image quality degrades on each modified line (and the degradation is different on each horizontal line). While this is virtually unnoticeable on a business Powerpoint presentation with really large type, it can easily degrade your video image when viewing movies, etc.
There are two ways to do this and still end up with that rectangular image you require.
First, place the projector at the exact right angle described in the manual. As I said earlier, depending on the projector, it usually means that if you are placing the projector on a table, it will need to have its lens even with the bottom of the screen, or slightly lower. If ceiling mounting, then (since the projector is upside down), then the center of the projector lens will typically be either even with the top of the screen or slightly higher.
The problem is, your table might be too low, or your ceiling well above the top of your screen. Now, if ceiling mounting you can usually use a mount that allows the projector to hang down on a pole to the desired height. Many people however would prefer to have the projector up higher were it is more out of sight.
And that, finally, brings us to Variable Optical Lens Shift, which is most often just referred to as Lens Shift. All projectors do come with a certain amount of fixed lens shift. If they didn't, the projector would have to be placed so the center of the lens is even with the center of the screen, vertically, and this isn't very practical!
So, the trick is to be able to adjust the lens system, so that the user can project a rectangular image, and then use controls that move the lens in a fashion that allows that rectangular image to move up or down the screen.
It really works!
Even optical lens shift does technically degrade the image, but not in the way of digital keystone correction. The result is a slight bowing of the image. Let's stick with a table top projector for now. If you are using lens shift to keep a rectangular image when the bottom of the image is above the lens, you will probably find that if you look at the top of the projected image, that the corners are a little higher up than the top center. If your screen is a 100" diagonal (about 87" wide), the actual amount of bowing will depend on a number of factors, but at worse the center top might be an inch or so lower than the top corners. Since your screen no doubt has a border, you aren't likely to notice unless you are looking for it.
So the bottom line, variable Lens Shift, is the best way to keep your image rectangular, unless you can place the projector right where it needs to be in terms of height. Even fixed lens shift (which, as noted earlier) will create a small amount of bowing, but variable lens shift will have different amounts of bowing depending on design, distance of the projector to the screen relative to the projector's vertical position, etc.
Of course there is also horizontal (variable) lens shift, which is found on some projectors, but few people have a problem centering the projector lens with the center of the screen horizontally.
Additional note. In home theater projectors you are more likely to find variable lens shift on LCD projectors than DLP projectors. I'm not sure why this is, but no doubt it relates to the internal layout of the two types of projectors.
Today there are several $2000 - $3000 LCD home theater projectors with lens shift, including the new Panasonic PT-AE900u projector (just reviewed), and Sanyo's not yet released Z4.
By comparison, the about the least expensive DLP projector with lens shift has been Optoma's recently discontinued H77. (they have a replacement in the works). Their DLP DarkChip3 projector, the H78DC3 (one of my favorites) also has it, but sells for around $4000.
If you don't have variable lens shift on the home theater projector you buy, try to place it at the right height to get no, or keystone correction that is so slight, that you just don't notice it.
Hope that helps! -art