forgot to say if it has an importance : i'm on window XP 32 bits

The developer of shrinkwrap is not active anymore. While trying to find someone for it, could you try to pin down which version of Blender stopped doing it OK?
(one of the 2.5x versions ever worked?)

Just downloaded and tested 2.53beta and it works as good as in 2.49b
I will test more version and will report which one started with the problem
(problem exist in 2.59)

I think i pinpointed it :
2.56a - beta (win32) shrinkwrap projection has same good result as 2.49b
2.57 (win32) has the same bad shrinkwrap projection as in 2.64a

That's of great help, thanks :)

Campbell: you did most of the fixes there then;

Commits from revision 34986 back to older ones.

Sanc: attaching a .blend file example would also help! If too big, put it in www.pasteall.org - or better, make the simplest possible case that fails. Thanks!

In the part of the report in how to reproduce it, i gave a link to the example blend already ;)
http://www.pasteall.org/blend/17287

the error is caused by my commit r34706, to fix [#25801], testing further...

reverted r34706, commit r51880,

some strange stuff was going on in this modifier still, committed improvements, r51881.

Unfortunately it is not completely fixed from some test in r51962 (win32) from the buildbot

I have another blend if you wish to try that display the problem :
http://www.pasteall.org/blend/17359

In the blend you have a sculpt (that i set to invisible (to keep viewport performance good) and the retopo of it.
Add a Shrinwrap modifier to that retopo version that target the sculpt and set it to Project
Enable both positive and negative for best result as usual.

The problem is shown in the attached "newtest21.jpg"
As you can see there are still lot of vertices that project wrongly to the other side of the model.

But -much- less than before Campbell Barton fix in which it resulted in what is shown in the attached "oldversionbug21.jpg" .
On another positive side, i tried in 2.49b the same file and the result is much worse with 2.49b than with r51962

Little update on the blenderartist board, in this post from the user EnV :
http://blenderartists.org/forum/showthread.php?271391-About-the-problem-with-shrinkwrap-modifier&p=2237603&viewfull=1#post2237603

"
Sanctuary, I tried your file (in last botbuild, under Ubuntu); assigning a smooth modifier with a factor of 1.000 and placed before the multires (subdivision level 3) fix all the problems with the "Project" mode of the Shrinkwrap (still, something is probably wrong with the modifier; and what is the "Subsurf Levels" button meant for? It doesn't seems to do anything. Campbell?).
"

And indeed, adding a Smooth modifier on top of the modifier stack prevent the "face explosion" problem that appear in the new test blend.

@Sanc Tuary, I checked `http://www.pasteall.org/blend/17359` and Im not sure this is a bug at all, the verts that cross the mesh are around the seams of the mesh (eyes, and neck).

I zoomed into the neck vertices that look like errors, so Ill leave this report closed unless you can show a model which has verts which do infact overlap faces but behave incorrectly.

The smooth modifier just contracts the verts inwards a little so this is why it `fixes` the problem, but its not a bug.

If you project verts you have to make sure the geometrt overlaps.

Thanks for pointing, i removed vertices that weren't overlapping the sculpt surface and it works perfectly with the shrinkwrap project.
Not a bug at all, it was my user error i didn't carefully checked those extremities, sorry.