Quote Originally Posted by mariannes504
I greatly appreciate your advice on the in ceiling speakers - it makes sense. Also, you answered the floor standing speaker issue we will be using a subwoofer. What type of Paradigm speakers would you recommend?
For your price range, the Studio v.3 series fits in nicely. Keep in mind that I already own a 5.1 setup using Paradigm Studio speakers, so I am understandably biased. The standmounted models are the Studio 20 ($800) and 40 ($1,100), with the floorstanding 60 ($1,500) and 100 ($2,200). If you plan to use a projector and have enough room underneath the screen to accommodate the speaker, I would actually suggest using three identical speakers up front. The horizontal center speaker is really more of a compromise than anything in that the only reason for that design is the presence of a TV screen in the middle. A setup using seven Studio 20s would cost $2,800, but it would be perfectly voice matched all the way around, or a five speaker setup with Studio 60s up front and Studio 20s in the back would run you about $3,050. No matter what models you use up front, I would recommend going with four Studio 20s in the back since their smaller size gives you more options for placement and positioning, and you typically want the surrounds positioned higher. Or if you prefer dipolar surrounds, the ADP-470s cost $950 a pair.

Quote Originally Posted by mariannes504
I was off a foot on our room size it is going to be 12 x 16. We will not be sitting next to the wall but 9-10' from the screen with a small bar & couple of chairs immediately behind seats. Small set up but the main use will only be for a few people.

I have to set up pre-wire now - would you go ahead and prewire the additional two speakers for 7.1 down the road??? Where would these speakers go??
That kind of configuration makes a 7.1 setup kinda tricky depending on how the backwall is setup and how close it is to the seating position. As far as wiring goes, are you planning to prewire the surrounds as well? It's fine to prewire, but there are plenty of options as far as mounting and positioning go, and for all you know, it may not be practical to go 7.1 anyway. Like I said, focus on the 5.1 setup first and then expand it after you've gotten everything properly setup and familiarized yourself with the functions.

Quote Originally Posted by mariannes504
Have absolutely no experience with Amplifiers - help in this area???

What receiver would you recommend?
If you're happy with Onkyo, go with that. In general, comparably priced receivers will have subtle, but not huge differences in sound quality. Right now, Yamaha's pretty frequently recommended because they are consistently reliable receivers and their recently introduced midlevel and flagship models now come with a parametric room calibration feature that makes a very clearcut difference in sound quality.

My only point with amplification is that you're right at the point where you can potentially go with multichannel separates. Receivers can sound quite good, but separates from companies like Anthem, Parasound, Rotel, Classe, Lexicon, Theta, or Adcom give you just another step up in sound quality. Generally, the starting price for multichannel preamp/amp separates is in the $4k range and can go well into the five figure range.

Receivers generally have more integrated features and are a lot more convenient to use. Separates are generally built to higher spec and can handle more demanding speakers. Plus, they are great in that you can keep a decent amplifier even if the technology changes, whereas a receiver can eventually become obsolete depending on how drastically the technology changes. Separates are probably not necessary with the Paradigms, but if you go with demanding speakers like Dynaudio, some B&W models, or panel speakers like Martin-Logan or Magnepan, the extra capacity with separates will probably come in handy.