Simply put, if a projector isn't square to a wall, its image will be warped. To fix it, most low end models use digital keystone correction. The higher-end method that relies on adjusting the physical lens, is finally coming to less expensive models like the Panasonic PT-AX100U (that we have had for a while). Here's a video of it in action.

There are several reasons why variable lens shift is better than its evil nemesis, digital keystone correction.

This image was lost some time after publication.

Keystoning is when a projector is long lined up completely straight with a wall and creates a less than perfect rectangle and looks more like a trapezoid. Some projectors try to correct for this with Digital Keystone Correction. This correction process compresses the "fat end" of the keystone, or trapezoid, therefore lowering the quality. It wouldn't be very noticeable with a Powerpoint presentation, but it can be significantly noticeable with video or high resolution pictures.

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The other option to correct non-perfectly mounted projectors is variable lens shifting. Most projectors already have a limited amount of lens shifting, but for the most convenience you want a variable lens shift that can move any direction while still maintaining a rectangular image (see video above).

Luckily, variable lens shifting is now becoming available on home theatre projectors that don't cost an arm and a leg. Aside from the one we tested, Panasonic's PT-AE900U, Epson Pro Cinema 800, Hitachi PJTX100 and a couple lower-end models from Sanyo all include the tech. Most of the projectors range around $2,000 to $3,000, which is fairly reasonable for a home theatre projector.

The Bottom Line
If you are looking at projectors for a home theatre, avoid projectors with Digital Keystone Correction and go with the variable lens shifting—it will look a lot better if you have to mount above or below the desired projected area.

Some keystone information via ProjectorNews