Sonic Benefit, Aesthetics, and Budget.
20% : 10% : 70%
This is how my current "theater" room is outlayed. This room is also my living room and not how I'd go about a dedicated room, but its the reality.
The 70% component for me is budget. As is, I don't have any money to spend after the monthly budget is spent on groceries, bills, gas, etc... I don't even have enough cash to take my wife out to eat, so where am I going to get cash to spend on HT? Well, that's right. Pinch and squeeze.
With the huge budget constraint, I have about 20% for Sonics and add about 10% for some sembelence of WAF. Honestly, Aesthetics isn't a priority to me or to my wife, so I can lunk that to only 10%. So, that leaves me with a budget-entry level system. I managed to get some eBay help and pick up a Pioneer Elite VSX-43TX to power things, and that's a pretty respectable piece. The speakers were just a carry over from College, and that is provided by Cerwin Vega. Big Sound, Big Thump, and Big Bass for cheap. High end sound? No, but for HT it works fantastic, and for pop/rock music its fantastic. Hey, it leaves a perfect target to upgrade once I do get some budget freed up. Add a budget Pioneer DV-588 for DVD's, Comcast HD, and a display courtesey of Hitachi, the RPTV 51S500, a great big dinosaur with an incredible picture without chunking down $5000 for a Flatty. The RPTV's are cheap(comparitively speaking).
Ideally speaking, I'd put a more appropriate ratio of:
1/3 : 1/3 : 1/3
Equal parts for optimum performance and looks within any budget.