Optoma never stops surprising with its low-cost high-definition projectors. The noteworthy HD81 with its 1080p DLP chipset recently wowed bargain hunters, and now it's set a new price point for big-screen HD with the tiny HD65.

For just £500 you get a pucker HD Ready projector with a native 720p DLP resolution, HDMI and component video inputs and potentially a 348in image. All this is crammed into a tiny unit with a footprint that barely covers a sheet of A5 paper.

Of course, you should be prepared for some sacrifices at this price point. There's no optical lens shift, so it's a case of lining the HD65 up to get your image on screen without using excessive keystone correction to make it fit. There's also a noticeable fan noise, but it won't be heard over the racket of an Xbox 360's rotor blades anyway.

Bold pictures

From the box, the brightness is searing and the colours lurid, so unless you're in a very bright room, it's best to tone them down a little to get a more acceptable image. That said, the picture is reasonably impressive if your source is set at 720p.

Good detail is paired with a boldness and contrast that comes with a bang up-to-date DLP chipset. Blacks are deep and reds dazzling. Whites, on the other hand, seem to have a touch of magenta about them, which is rectified by paring down the colour temperature and choosing the 'film' preset instead of 'video'.

While its vibrant tone doesn't look quite as refined and natural as the Panasonic and SIM2 models, it does at least suit animated movies and video games. Switch into 'graphics' mode in the onscreen menu for the best results. Sonic the Hegehog on PS3 is crisp and fast, and while the ultra-slick race tracks of Gran Turismo HD are a torture test for some projectors, this modest Optoma has no problem maintaining detail in fast motion.

Over the rainbow

Traditionally, single-chip DLP is prone to 'the rainbow effect,' a characteristic of the colour wheel used by DLP which causes flashes of red, green and blue to distract the eye in areas of high-contrast. And this Optoma is no exception.

Given the price point, though, it's probably something I would be prepared to live with. The image quality for HD games and movies is high and the portability and price point of this capable projector is sure to appeal many.