A few years ago, we bought a digital (data) projector for our classroom. Sure, our school had a projector on a media cart, but to be perfectly honest, it was inconvenient to have to share it with the entire school. (And murder if you had to "wheel" the cart up a flight of stairs.)
We've adopted a balanced literacy approach to explicitly teach decoding and comprehension strategies, and we wanted to use the computer projector pretty much 24/7. So we splurged a thousand bucks and bought our own.
We set up our data projector permanently on a tall filing cabinet. We use the entire side of the classroom wall to project a giant image of the teacher's PC. Pretty much every day, we would use the data projector during our modeled and shared reading lessons, as well as during modeled and shared writing. It was hooked up to the Internet, so we could use it for our media literacy lessons as well.
Pros
Attention-grabbing. After all, we live in a TV generation. (After some initial training, the novelty wears off and you can use the technology more effectively as a teaching tool.) With the right set-up, you can display an image larger than any overhead projector image. Easy to read from anywhere in the classroom. In our class, we aren't projecting onto your typical, pull-down, overhead projector screen. We've covered one side of the room with white paper and created a huge 7' x 10' image. Can model how to effectively use technology. (Spell check, effective searching on line, copyright issues) as well as critical thinking skills. Easy to integrate multimedia into your lessons. Can model comprehension strategies on non-traditional texts (i.e. blogs, wikipedia, website articles, ezines) as well as media texts (i.e. commercials, youtube) Easy to display quickly-changing information on the board (i.e. graphing in Math) If your school has a scanner (and many photocopiers / printers do have a scanning feature), then it's easy to digitize stuff and throw it on the data projector in the same way that you would throw a photocopied transparency onto the overhead projector.
Cons
The biggest draw back is that you can't (easily) write on your documents (compared to an overhead projector). Sure you may be able to type faster than you can write, but there are some things that are better done by handwriting (i.e. revising or editing a piece of shared-writing.) Digital ink can be tricky or expensive. Technical difficulties - technology doesn't always work. Computers crash, hardware fails, bulbs burn-out... all when you least expect it. Expensive. Although the price of projectors are continually dropping, you'll still have to shell out 0 to 00 for a decent, new data projector. Security. We've locked our projector to the desk to prevent theft, but that doesn't mean things can't go wrong. Will you lock it up at night? Take it home on the weekends? Where do you put it when you have a supply teacher covering your class? Insurance and Replacement Cost: Chances are your personal items aren't covered under the school's insurance plan and won't be replaced if anything happens. Better call your home insurance provider to see if your belongings are protected at work.