A flat-panel display system and a display method utilizing microprojection techniques whereby each pixel of the display acts as its own micro-projector. The micro-projector utilizes a reversed Schlieren optical arrangement. A flat fiber-optic illuminator and an illumination method provide collimated light for the display. A layer of light scattering material such as polymer dispersed liquid crystal (PDLC) is interposed between the illuminator and the rear-projection screen of the display. The scattering layer, when in a first state, allows the collimated light to pass through openings in an aperture plate that is part of the microprojection display. In a second state, the scattering layer scatters the collimated light. Side and vertical walls of the aperture plate absorb most of the scattered light resulting in a high contrast ratio for the display. The degree of scattering can be controlled to provide for a gray scale for the display. One manner of control is the use of active matrix components on a substrate of the display.