The VW40, I should mention right now uses LCoS technology - a reflective Liquid Crystal on Silicon. In that regard, it is reflective like DLP, rather than transmissive (light passing through), like tradtional liquid crystal projectors (LCD).
Now, just to keep technology things straight, Sony doesn't refer generally to LCoS, but prefers their proprietary name for it: SXRD. JVC, whose DLA-RS1, and DLA-RS2 are direct competitors of the Sonys, also uses their own LCoS technology, which they call D-iLA. So, call them what you will, both companies are using LCoS panels, of their own design.
About the only difference I can determine between the Sony VW40 and VW50 (besides price), is the upgrade of the HDMI inputs to 1.3. This is good news, but not great news. Unfortunately, like the VW60, the Sony may support 1.3, but does not support the Deep Color capabilities that HDMI 1.3 allows. Bottom line, as Blu-ray discs start providing more color depth in the form of Deep Color, the Sony can't take advantage of that.
With a price $1500 below the old VW50 Pearl, the VPL-VW40 definitely is an improved value. It does face some really stiff competition, however, in the form of the Epson Home Cinema 1080 UB, and a couple of other projectors. We'll look at how this Sony VPL-VW40 stacks up, later in the review.