Overall contrast is good, although don’t expect OLED-style blacks, nor the performance of the pricier Optoma UHZ65. With letterboxed movies, black bars are still projected dark grey. Acer’s contrast claim is 1,500,000:1 with Dynamic Black image management (in which lamp power is adjusted dynamically to optimise black levels).
As this is a single-chip DLP projector, I was aware of fleeting rainbow fringing, although this was less of an issue watching movies, and more evident when navigating menus. As always, you should get a demo before investing to see if it bothers you.