I did wonder the same: what projection is used in NDs.
I would say it is like a polar stereographic, only its center is always the airplanes position instead of on the North pole. Straight lines would represent great circles, for practical purposes. Angles and distances between two points in the ND would very much resemble those of the real earth. At least any angle and distance from the airplane would be good. Meridians and parallels would appear slightly curved, I guess.
Anyone knows what do they use?