Thanks for the great ideas everyone.....keep them coming. I've learned quite a bit from this forum. For the most part, I'll only be watching movies on my system. I originally thought 7.1 because the room is fairly large. That, and I figured if my old 5.1 Yamaha boxed set sounds decent upstairs, so a 7.1 must sound that much better......I guess not. I think I'd like to get a good center, two decent towers up front and fill the back with whatever......
What I've found is that having speakers that can get loud without dynamic compression is more valuable than surround sound, even for movies. So I ditto what KEW said about testing the 2.1 waters. You of course want more than just "loud speakers" but I mean that a good pair of speakers will likely do that better than a mediocre set of five or seven.
Remember, most of the content you'll hear in a movie will be voices, gunshots, explosions, and symphonic music. Often the only surround effect in an entire movie will be Crickets Chirping. Is that really worth sacrificing the fidelity of the aformentioned stuff?
Here's a really good thread at HTS regarding surround sound with input from a studio engineer:
http://www.hometheatershack.com/forums/audio-processing/36269-has-surround-sound-been-forgotten.html
I would recommend the Ascend CMT-340 SE's
http://www.ascendacoustics.com/pages/products/speakers/cmt340m/cmt340m.html or perhaps the lesser HTM-200s or CMT-170s
Get them crossed over to a decent ported sub (for that room mind you.. nothing is wrong with sealed) like the ones offered by SVS, EMP Tek, Outlaw, Funkywaves, HSU, Rythmik, Dayton, and Lavasub,