Head-mounted display design is an iterative process. As such, a standardized user-centered assessment protocol of head-mounted performance during each phase of prototype development should be employed. In this paper, we first describe a methodology for assessing prototype head-mounted displays and virtual environments using visual performance metrics. We then present an application of the methodology using a prototype of a projection head-mounted display and the first module of our assessment: resolution visual acuity as a function of contrast. To evaluate the total system, we also used three different light levels and two different types of projection materials. Results from both studies indicate that the visual acuity metric resolution accurately identified reductions in user visual acuity caused by parameters of the projection display and those of the phase conjugate material. Results further support the need for benchmark metrics that allow comparison of prototype head-mounted performance through each stage of design.