The science behind this fascinating technology is that it sends light from a metal halide lamp through a prism that separates light to three poly silicone panels, one each for the red, green, and blue components of the video signal. A metal halide lamp is better yet more easlity identified as the lights you see in a football stadium when it starts to get dark. As for the 3 "primary" colors, these colors are the basic colors that make up the other "secondary" colors in the color spectrum.
Now, their usefulness can come in handy in different situations. One such situation is at a school. A teacher may have a lot of information for his/her students to write down. Since the class is very large, it would take FOREVER for every student to copy down their share of the notes. This is where the LCD comes in. The LCD can project the information to the whole class at once. This really save time and also is interactive. Another situation can be for entertainment. You can use the LCD projector in order to showcase a movie or such to a large group. This also save money because you won't need to buy a new large television, instead you can have an LCD projector for about half the price and extra change to spare for any extras.
Reference:http://en.wikipedia.org/wiki/LCD_projectors
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