In projected mode, you have to specify a map profile (i.e. a map projection). You also need to tell osgEarth the spatial reference of your feature data if it differs from that of the map. 
For example: 
<map name="demo" type="projected" version="2">
        <options>
                <profile>global-mercator</profile>
        </options>
        <image name="world" driver="gdal">
                <url>../data/world.tif</url>
        </image>

　　　<elevation driver="tms" name="ReadyMap.org-Elevation">

                <url>../data/elevation/tms.xml</url>

        </elevation>
        <model name="polygon" driver="feature_geom" overlay="true">
                <features name="data" driver="ogr">
                        <geometry>
                                POLYGON((-74.096 40.332, -74.096 42.386, -70.988 42.386, -70.988 40.332)) 
                        </geometry>
                        <profile srs="wgs84"/>
                </features>
        </model>
</map>

osgearth使用prjected投影