Positioning
I'll add my voice in and say that you're on target with the TV and receiver, but, as others mentioned, you don't want to have that TV above the fireplace. For one thing, it is an LCD and unless you have it tilted down slightly, it isn't going to look its best unless you are fack far enough to narrow the angle of view.
Aside from that, putting any kind of electronics above a fireplace is risky, not just in terms of potential for something having, but even for being covered by warranty. Most vendors clearly state a minimum distance from heat-generating devices in order for your warranty to be valid.
As far as budgeting goes, this is basically how I break it down myself. TV and DVD player = 50% of budget. Speakers, receiver, cables, and any A/V rack should equal 50% of budget. I imagine that I'll be kicked around for saying this , but I consider it a good measure for REAL-life home-theater to be well balanced.
For example... TV + stand + dvd player = $2500 + $300 + $200 = $3K
Speakers (F,C,S, and sub) + receiver + cables + rack =
$1600 ($500 + $300 + $400 + $400) + $600 + $400 + $400 = $3K
Even though your budget is $5K, my guess is that realistically you'll probably inch closer to $7K when you consider everything you want to do plus shipping + taxes + extra warranties, etc.
The reason why it is good to budget this "50/50" is that I've seen many people build Home Theaters spending so much money on the video and skimping on the audio. In effect, more emotion and realism is conveyed purely through the audio. In fact, you can have a pretty amazing experience watching a DVD on a regular 36" CRT with a very good surround sound system. Getting thick speaker cable (I made my own using high-end 24K gold-plated banana plugs and 3 x 12 gauge wire for each connection) along with a good reciever (Yamaha, Denon, HK, Pioneer Elite, Marantz), and a good set of speakers (Klipsch, Polk Audio, JBL) will truely make your home theater sound pretty amazing. Get a good subwoofer to go with it and a good audio cabinet and you'll be in business!! Remember too that visually, in a living/family room, you don't want a screen that is too big either so, if getting a 50" saves you $600 over a 55" or 60", it may be better to do. In the end, it is the entire environment that matters and having a well-balanced home theater with good quality components makes all the difference.
I had some Bose bookshelf speakers hooked up to a Sony receiver and it did a decent job. However, once I hooked up my Klipsch bookshelf speakers I noticed a SUBSTANTIAL difference in the experience. I can't wait to hook up my new receiver and get my sub in. Even without those, scenes really have impact now. Here is a good test... check out "The Incredibles" DVD. There is a scene where Mr. Incredible rips a moving pod off the tracks and hurls it at two guards (where it lands and literally crushes them and a gate they are guarding). Even with just the two reference Klipsch bookshelf speakers, that pod sounded like it landed in my lap and the first time I heard it (and actually a couple of times after) it made both me and my wife jump! I never got that with the Bose speakers. If you have the movie, take it with you to a Tweeter or Good Guys or good A/V store and test out that scene with different receivers and speakers... you'll see what I mean. There are also some good scenes to use from Matrics discs and the Jurassic Park series, but, plenty of people have used them already, time for something new! I hope you enjoy it, and remember, this should be a fun experience! Don't stress out too much about what you get or don't get, just enjoy the ride!
