The mural is projected on the back wall of the set, between two pillars. The portion of the wall between the pillars is made up of three pieces. The center piece flies straight up, and the left and right pieces fly up/out diagonally, and the muses literally "come out of the wall."
During "The Fall," there's a great moment where the muses go behind the pillars (the actors disappear behind the wall set piece), but the projections "run" out from the other side of the pillar and up onto the wall. It looks VERY realistic due to the way it's timed.
There's a photo on the projection designer's website that shows the tour projection on the back wall.
http://www.borovay.com/pix/xanadu.html
"I'm seeing the LuPone in Key West later this week. I'm hoping for great vocals and some sort of insane breakdown..." - BenjaminNicholas2