Oh there is a lot to say on it.
Most of it sits around your budget and how intense you want to go with this.
Screen size is generally determined by viewing distance, not by wall size. If you like sitting in the middle of the theater then your screen size should be about .66x your viewing distance in width. So viewing at 12' = 8' wide screen = 110" diagonal.
Now, I will just throw this out there: If you want to do it right, then make sure the room is done right. Front projection needs dark. People throw a curtain over the window, then say 'DONE!' - and that's just not it. The walls, ceiling, and floor must be dark. Black is ideal for the projector, but not the wife. So, a dark color - blue, maroon, browns, greys... doesn't matter. I really like dark grey carpet, but dark is the word. Likewise, a dark ceiling is required.
Then you have to light the heck out of the room! A normal room this size may have a dozen recessed lights installed and be 'done'. Once again, this is not appropriate if you have gone with a dark setup. About 24 lights in that space is not unrealistic and zoning them into 3-4 zones is a decent setup.
Example:
AV Integrated - Custom Audio Visual Integration In Washington DC Metropolitan Area
Almost everything about a good theater setup falls outside the projector and screen. Once you have the room details taken care of, then any decent manufacturer will give you good product. Epson, Panasonic, JVC, Sony... I'm not a huge fan of BenQ reliability, but their projectors certainly look very good. You just have to get the wires in the right place based upon the screen size. Typically about 1.25x the screen diagonal - give or take a foot or two. For screen brands, the big three are good - Draper, DaLite, and Stewart. But, even screens from Monoprice and others are solid.
TAB-TENSIONED MOTORIZED!
No arguing on this.
If your screen must go up and down, then if you want it to remain flat for more than a year, then you listen to your buddy BMXTRIX on this one.
Our family room setup (in the lighting examples above) are medium grey and dark green with medium grey carpet.
We finished out our basement and went to a burgundy and dark grey setup. It's better downstairs in the basement, and out daytime light control is better (but still not flawless). The dark is really nice and good lighting helps keep it family friendly.
