I'm going to try to answer the actual question rather than saying whether I think that chalk or projector is better. That "question" being:

It would very much like to hear about your experiences with using slides in the classroom, possible pitfalls that you may have notices, and ways you have found to optimize this.

(Though I'm curious about the request for ways found of optimising pitfalls!)

I switched to using beamer slides 2.5 years ago. I'm partway through the fifth course that I've given using slides (and the course immediately prior to those was given on chalkboard but having prepared them as slides - a half-and-half experiment). By-and-large, I would say that I give better lectures using the slides than I used to when giving chalk talks. The following is a fairly disorganised list of my thoughts on both why I chose to switch and things that I've learnt in the process. I hope that this will be of use to you. Feel free to contact me for more details, and we've also recently been discussing this a bit on the nForum.

1. A big reason for me switching was that I teach in English in a Norwegian University. Although the students have excellent English, it is not their native language. It takes them longer to copy from the board, and their error rate is higher, so more time in a chalk-talk is wasted waiting for them to catch up than I felt I could allow. Giving the lecture using slides meant that I had much more control over where the students were focussing at any particular time (mainly, I wanted this to be on me).

   (To be clear: the time taken was in addition to the necessary time for students to process ideas that they've just been told about. Of course, pauses are necessary. But pauses by happenstance - because the students are busy copying the board - are not the best pauses.)

2. As a consequence, I always make my slide notes available beforehand. Admittedly, sometimes it was at 11pm before an 8am lecture, but no-one's perfect! They can get the actual presentation, a compressed version (the trans option), and a handout version (they are strongly encouraged only to print the latter). That way, they can read in advance what I'm going to show them, and they can bring the handout version along to add any additional notes if they wish.

3. The handouts are not a substitute for going to the lecture. The slides are not a summary of the lecture, they are what I want the students to be able to see while I am talking to them about something. Ideally, when the students look at the notes afterwards then they will be able to remember (more-or-less) what I've said. But if they weren't at the lecture then they won't have anything to remember so the handouts will be of less use (not of no use, it will still say what topics were covered so they can find out about them by other means).

4. Lectures never go completely as planned. But never use the chalk-board and the screen. Whenever I see someone doing this at a conference I want to run out of the lecture hall screaming. Not only will the lighting be completely different for both, but also the students will have the wrong mindset and will take time to make the switch. Use a system whereby you can write on the presentation (and can bring up blank pages if needed). You can even leave deliberate gaps if you want! As well as not requiring a change in gear, you can then make the annotations available afterwards (and have an easy record of the annotations that you made when you revise the slides for next year). I've used xournal (for Linux), jarnal (when forced to use Windows), and am currently using an iPad (despite what's said elsewhere, this is extremely usable for this). (Incidentally, I'd say that going the other way is acceptable: if you are primarily using the board and then want to show a couple of fancy pictures then so long as it doesn't take an age to set-up the projector then it's okay.)

5. Practise. Get a system so that your writing on the screen is acceptable (don't worry about perfect), you know how your program works, and you can change pages easily (preferably without looking at the machine).

6. Yes, it usually takes longer to prepare the slides - first time. But once you're used to the flow of writing a beamer presentation then that aspect doesn't actually add that much more. What probably adds the most time is that you are now forced to completely prepare the lecture in advance, rather than "winging it" and claiming that it is "good for the students to see the professor make mistakes". (You can probably guess my reaction to those!) It can take some effort to get a really nice system, I think I have one, and now it doesn't take me long to prepare a presentation.

   On that note, preparing your notes in LaTeX makes it much easier to prepare it in "layers". First, lay out your lesson plan (you do have one, right?), then add the frame titles, finally add the content of each frame. Then go back and adjust the lesson plan according to what did and didn't fit as you expected. (And it's possible to produce the lesson plan from the same source as the presentation.)

   And when you come to reuse the slides, it's much faster.

7. Think always "What can the students see right now?". If you want them to be able to refer to more than you can fit on a slide, consider giving them a "cheat sheet" handout as well. Slightly ironically, giving the lectures using LaTeX means that I am much more aware of how the presentation looks, something that is just as important as what is in it.

8. As hinted above, my slide notes would not form a good set of "traditional lecture notes" from which to revise. But then I don't believe that the chief aim of a lecture should be to produce that. Again, consider using other methods for this. For my course, I have a wiki where I can put more lengthy arguments. I use homework questions to "force" the students to read the wiki.

That's all that I can think of right now. You can get an idea of what my lectures look like by visiting the home page of my current course: http://mathsnotes.math.ntnu.no/mathsnotes/show/TMA4145+Home+Page.

What I've said above is phrased a bit like advice, but it's really just a list of things that spring to mind when I think about how I've adapted. I will give one genuine piece of advice: don't base your lectures on what worked best for you. The reason why should be obvious! But to illustrate the absurdity, let me note that the undergraduate course in which I learn the most and where I really feel that I understood and still understand the topic the best, was the worst lecture course that I ever went to. Why? Simple: because I couldn't learn from the lecturer, I was forced to go and learn it by myself. So now I mumble, write illegibly, stop halfway through a proof, and get wildly sidetracked by irrelevant questions - because that's what worked best for me!