I started digital decorating a couple years ago and after some trial and error, I've figured out a pretty easy way to take Halloween decor to a new level. Be forewarned that the following is expensive, but it as an investment. Once you use it a few years, the price is amortized and you don't feel like you've spend hundreds of dollars on something used once a year.
There's three basic factors to consider: the projector, the video, and the screen:
You'll need to invest in a quality projector that will run anywhere from $300-$1000 dollars. Epson makes some of the best reviewed projectors that are bright, colorful and long-lasting. The gamut runs wide so be prepared to get what you pay for since many cheap projectors give cheap results. Throw refers to the distance the projector needs to be from the screen. The closer to the screen, the smaller the image. The further from the screen, the larger but often dimmer and less detailed image. Most projectors need to be at least 10-15 feet from the screen, unless you get a more expensive "short throw" projector which can be placed much close. No projectors are weather proof so if you're planning to project outside, consider some sort of enclosure. But projectors get super hot so you need to have plenty of ventilation and airflow.
Once you have a projector you need a scene to project. If you're good with video editing you film your own. If you're not, then you need to buy a ready-made video. AtmosFearFX is the current leader in digital decoration, and they sell DVDs (at Amazon & Spirit Halloween) as well as HD downloads directly from their website. I prefer the $10 individual downloads since I typically only display one scene per year. You can also find videos for sale from Eerie Elegance, Fright Props, and even stock video places like iStockPhoto. To play the video you'll need to connect a DVD player or a digital media player to the projector (a few rare projectors have onboard playing capabilities). The digital media player is usually the easiest way to go. You simply copy your video onto any standard SD card or flash drive, insert into the player, and hit play. These players have automatic looping options so a 2-minute clip will repeat over and over.
When considering where to place your projection, think of clear spaces with at least 10-15 feet of space behind or in-front, with access to an electrical outlet. Initially I wanted to project onto my garage door, but this required a powerful (read: expensive) short-throw projector and having my car parked far back in my drive way. I thought about projecting onto the front of my house, but that required setting up the projector in the middle of my lawn in some sort of secured enclosure set out nightly. I ended up projecting onto my front window which is not as large but just as effective, and mounted the projector onto my ceiling out of the way with an inexpensive rig. You'll also need some sort of material to project onto. You can choose an opaque material to hide everything behind it, or an semi-translucent material for a ghostly effect. Either way, make sure it's one large piece of fabric with no seams, wrinkles, or patterns. I used a $30 silvery gray bed sheet (Twin XL size was perfect for my window). Since I'm projecting from behind I didn't want people looking straight at the projection to see the hotspot from the suspended projector behind the screen. It kind of ruins the illusion. Depending on your placement you can avoid the hot spot by simply placing the projector at the perfect angle.
There's so much more to learn about digital projection and this is meant to a brief introduction to the process. I've been learning from my Halloween friends, online tutorials, and simple trial and error. Once you figure out your perfect location, you'll be obsessed with what to project next. And believe me the neighborhood traffic (walking or in cars) comes to standstill in-front of that window. It's a lot of fun.