My HT room is 13 by 13, with 12 ft. ceiling. There is nothing wrong with such a room, in fact I find it better in some cases because it is more manageable.
My gear consists of 50" Samsung 1080p Plasma display, Denon AVR-3808CI Receiver, Oppo 980 DVD player, Definitive Technology Mythos-1 towers, Mythos-3 center, Mythos Gem surrounds and Supercube-2 sub.
My leather reclining couch is about 9 ft from the display, the front speakers are about 7.5ft from the listener. I love the sound and immersion I get in this room. Everyone who has experienced it has told me they love it and wish they could build their own system like it. So, it definately is feasible.