Help with New Construction - placement and system

Hi,

This is my first post and would like to say that this is a great forum. I have been reading for several days and it shows how much of a beginner that I am. We are currently building a house and I would like to install a sound system. Budget is 1500 - 2000. I am including a drawing of the living room for placement recommendations. I have a cathedral ceiling that spans the living room and kitchen, so I am not sure where to put the speakers. I would like to go with small speakers if I can. I am going to try to work the furniture arrangement around the sound system. If you were in my shoes, what would you buy and where would you put it. Also I live in East Tennessee, does anyone know of any good places to go hear the equipment.

Thanks
Spudde3