Have you priced digital cinema projectors, Jamie? Try $100k... each. Buying 35mm projectors- even brand new ones- pales in comparison, and adding a $100 DVD player is a piece of cake.
Most movies are available in digital now, but a standard method by which they are distributed hasn't been established yet. They take 7 hours to download via satellite (each) and the hard drives they are mailed on are not reliable.
It's only a matter of time before digital overtakes film, but we're talking decades. This is the hottest topic in cinemas today- just do a search here and you'll find mucho controversy on the subject.
My opinion... stick with tried, true, and easily obtainable 35mm film, but keep yourself updated on the advances in digital. I'm in the same position you are, but after tons of research on the subject, and as amazing as digital sounds, 35mm wins out. You can always add one projector later when they become cheaper and the movies can be easily distributed.