Ok, so I have two modest home theaters (basement and main floor) and I'm installing one in my newly constructed bedroom over the garage (my wife falls asleep duiring every movie, so now she doesn't even have to go upstairs after the movie is over). I was poking around in the member's home theater threads and you all have some SICK home theater rooms! It got me thinking of possibly working on my wife to transform the "scrapbooking" room in the basement into a full-fledged dedicated home theater room.
I haven't brought it up yet

but wanted to do some fact finding anyway. It is about 12x12 and would be fully enclosed. 8.5 foot ceiling. I have other space in the basement (finished) and have an older theater down there that we don't use that much. I was thinking of using this 12x12 and getting higher quality components and "doing it right".
Anyway... would 12x12 be a bit too small? The other areas in the basement are not really conducive to a dedicated room. I couldn't do a projector down there - would have to do a 60 - 70" LCD or LED. I could probably get seating for 4 or 5 comfortably. This is probably a few years off, as I'd want to do some construction and re-rig the lighting, etc...
Any suggestions for a room that size? Thx!