Yes - any wireless communication will have a very large overhead as it frequency hops and does error-correction. Rarely will you get 108MBps out of 802.11n, since most 802.11g communications never get above 10-15MBps, far short of the rated 54. A couple of more points
Say someone wanted to throw linux on an avr
An AVR is nowhere near powerful for something like Linux - you’d need at least an ARM9 to run Linux of any decent sort. The Gumstix would probably be a good starting point in this respect (as the hardware development and LCD connection has already been done - getting it up and running is not trivial though).
Bluetooth 3.0 will be 480Mbps which would allow for 1024x768x18bit*30pfs = ~425Mbps
Over a wire, yes. Over wireless, definitely not. Apart from VGA sync signals that you haven’t taken in to account, all the wireless communications will need to be serialised into packets with headers, checksums etc, error correction will need to filter bad packets, the data rate will need to be dynamically adjusted for signal strength and the frequency adjusted for interference… The list goes on. Basically, the 480MBps is the absolute maximum raw bit speed under perfect conditions, neither of which exist outside the (sterile, EM shielded) lab.
Am I oversimplifying things?
Yes. My question to you is, if you’re wanting a wireless LCD for a microcontroller project… why not just put the microcontroller on the LCD? Why make two devices that both require power supplies, control circuitry, wireless comms etc. when you can make one? And then you’ll get your raw data speed with no trouble. If you had a big beasty desktop PC running some kind of software that you absolutely had to have wireless access to, then I could understand it, but in that case you’d be better off RDPing into it using a netbook or laptop over a wifi connection. Costs about the same, zero time spent developing hardware and you can use a laptop for a whole lot more than just a wireless screen.
I’m not trying to discourage you from doing an electronics project on your own instead of just buying something - I’m just telling you that it would be a huge headache to try and wirelessly transmit video. A much more fun project would be to build a Gumstix mobile device with the PSP LCD (or the one they sell with the Gumstix, which has the same resolution), run Linux on board, and add a whole bunch of interesting Sparkfun devices to it - accelerometers, gyros, RFID readers, XBee modems, capacitive touch imput, GPS, GSM, ultrasonics, lasers - make it your hackable, expandable control centre for all your other robots and electronic devices!
Will.
It’s an entirely new (quite good looking) architecture, and if you want to play around with it and Linux I suggest you get the ATNGW100 Network Gateway Kit - it’s tons cheaper than the STK1000.