We do movies in the pool a few times per year, the only down side is this time of year we have to wait until after 9 pm for it to get dark enough to start the movie. The equipment I use is an older JVC DLA G15U projector (new it was a $9,000 projector 15 years ago, I bought mine used about 6 or 7 years ago at a very low price) There are much better projectors out there today, but overall mine mostly holds its own against many lower end consumer models with about 720P resolution for 16x9 images (it is a 4x3 projector) and only has analog input, projection source is a laptop computer with projector connected to the VGA port. Speakers are Samsung HW-E550 2.1 channel system, these consist of a pair of front tower / bar convertible speakers and a center channel subwoofer, the nice thing about this setup for projector use is the front tower speakers are wireless (wired together in tower mode, or plug together as a bar) as and audio input subwoofer cube which can be placed center back by the projector. Most other brands with wireless are the other way around with remote wireless subwoofer and inputs going into front channel speakers. (this model seems to be discontinued now, I am not sure about replacements, but these are still widely available). My screen is a Camp Chef screen model OS-120 (original style not new lightweight OS-120L) 120 inch diagonal size 59x104 view area. My one wish on the screen would be, I wish the bottom of the projection area would be closer to the ground, instead of about 30 inches off the ground, bigger would also be nice, but mine works well with projection across the pool, and screen a out 3 ft from edge of pool, total projection distance about 33 feet. This requires my projector to be at about max zoom to fit the image on the 120 inch screen width. Prior to the 120 inch screen I used an 84 inch Sony 16x9 model, the 120 is a big improvement, but I think a 144 or 160 would be better yet.) As far as movie selection goes we have found that plotless wonders work best, you don't want anything anyone has to pay close attention to with people floating around, etc.
Ike