I suppose with the right colour-wheel, single-chip DLP can be OK. You'd still have the rainbow effect... The problem is most single-chip DLPs are designed for office use, so they boost white brightness at the expense of everything else by putting a clear segment in the colour wheel. It's great for powerpoint, terrible for everything else. And by necessity you're losing brightness because the projection system works by using colour filters to block out light; in the simple case of an RGB colour wheel, you're blocking out two thirds of the light at any given point in time. Three-chip DLP splits the light rather than filtering it, so it maintains brightness. That said, my frustration in that regard comes from me trying to light 180" and larger screens, not home theatre screens.
We've got a bunch of single-chip DLP projectors for our convention. Some Viewsonics, some Optomas, some Dells, some Acers, some BenQs, some Vivitek, and I might be forgetting some. They all uniformly have terribly colour, no matter what buzzwords they put or how well they claim to do. We put 'em up against one of our newer Epson 1940W, and the Epson just kicks their ass even when the Epson has a lower brightness rating.
That said, there is one disadvantage to 3LCD; it's not an LCD panel with RGB strips, so 3LCD tend to have a convergence issue; the red/green/blue subpixels don't line up perfectly well. You never notice this for film, but it makes them less than ideally suited for powerpoint.
I must admit, though, that I've never looked at a specifically home-theatre intended single-chip DLP projector, so my views may be skewed. It may certainly be true that they can have great colour when designed specifically for that task. The problem is that most of the projectors we're buying these days are over 4000 lumens. There are no home theatre projectors of any kind in that brightness range, only office projectors and in that range 3LCD beats the heck out of DLP office projectors.