Suggestion:
You might be able to find a used 720p (if you're lucky) or 480p projector for in and around $400. Odds are though that the projector will be older and might need a new bulb shortly after you buy it. Bulbs last up to 3000 hours, but can burn out prematurely just like a household light bulb does.
Then you need a screen. You can shine it on a smooth wall painted white or gray and maybe paint a black border around it to make it look like a screen. It will look cheap however and does require a bit of skill to get it nice and smooth.
You will also need some long cables for each of your output devices (DVD, cable/sat, xbox, etc) or one long cable if you have a AV Receiver. You would want an AV receiver (or a Home Theater in a Box) anyway, because a projector does not have speakers.
You would also want to bury the cable in your wall or warp it around the baseboard of your room to hide it. Otherwise you'd have a cable dangling in the middle of the room. Oh and then there is a ceiling mount if you wanted to go that route.
Best bet is to buy the biggest TV you can find in your price range. You won't have to worry about bulbs or having to buy a whole bunch of other equipment (which alone would stretch your $400 budget).
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For get getting a projector for the budget you have to use watching tv. Projectors does not have tv tuner at all to receive tv signals. The lamps on the projector don't last, normally 2,000 hours and the cost can start at $200. You are better off buying a tv, then again for a 42" it will also cost you more than the $400 budget you have.
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