Pioneer VSX-1021-k Receiver $550
For starters I do want to point out that the cost of this receiver should be less via amazon.
Beyond that though, I would NOT be comfortable with a $550 MSRP receiver as that's basically bottom of the barrel stuff. I recommend looking into older units with a higher MSRP, as they will have a much more powerful amplifier and preamplifeir section, which is the #1 most important part of any receiver.
Here is a NAD unit which should be a better value:
http://www.spearitsound.com/nad/T747.asp
or this Marantz:
http://www.accessories4less.com/mak...w-X-7ch-Home-Theater-Surround-Receiver/1.html
Epson 8700 UB projector $2,000
Elite 120' fixed frame $350
Sounds like a great choice on the projector. If you're okay with a bit of DIY, I recommend putting together an acoustically transparent screen. The biggest advantage of that is that you can mount the center channel vertically right behind the screen rather than horizontally underneath it (which in my opinion rarely sounds optimal and i actually often recommend using NO center than most horizontal center)
http://www.seymourav.com/screensDIY.asp
I strongly recommend TWO, even FOUR subwoofers. The problem with one subwoofer is that it's at the mercy of the room due to standing waves. One seat might sound okay, and another seat might sound distracting. With two subs, you can usually get multiple seats sounding pretty good. With four subs, you can get multiple seats sound great.
Here is a subwoofer you might wish to consider:
http://www.rythmikaudio.com/FV12.html
What little it may give up to the SVS in output, you'll make up with multiples, along with the aformentioned room-interaction advantage of multiples.
Bluray player? open to suggestions...
The ultimate choice is to go with an OPPO.
Personally I really like my Sony Playstation 3 as a bluray player
I have never purchased expensive audio equipment before and really have no brand loyalty to Klipsch it just seems to be a good company with good value speakers for the price... I would def like to hear alternatives that could make my money go a little further...
I personally think you could do better for your money than Klipsch, which many people find to be on the ear-piercing and bass-heavy side (although there's no doubt people who enjoy their higher sensitivity and unique sonic signature).
A fairly balanced pair of speakers won't immediately amaze you with oozing bass and surprising perceived details, but will rather be the kind of speakers that will always extract as much out of the recording as is there without adding much of its own signature. If the bass is there, it'll be reproduced, but only then. balanced speakers tend to be easier to live with for extended periods of time and keep drawing you back in for more, while having real detail and resolution rather than fake detail.
I'm also an advocate of getting four reasonably inexpensive, but good surrounds and leaving it at that.
Do I have any real recommendations? Given $2200 on speakers, I think I would swing for
2X Philharmonic Audio 1 ($1600 + shipping)
4X
Pioneer SP-BS41-LR ($300)
The above combination would be outstanding - in my opinion. At about $1900 + shipping I'd imagine it being an outstanding deal. The Philharmonic 2s at 2000/pr btw are a worthwhile upgrade that uses what many consider to be the best tweeter in the world.
Another equally excellent choice for surround speakers, would be EMP e5Bi($500 - BUT if you
check out their b-stock section you can find some discount).
If you're willing to spend a bit more on surrounds, I also think the
KEF Q100s are a great choice - thanks to their coaxial driver they have an unusually even radiation of sound into the room both horizontally and vertically.
I think four of ANY of the above speakers, will be outstanding as surrounds. As for a center... You've got three options. I chose the "no center" route as I don't consider centers on average to be a strong value relative to the rest of the system.
Else you could do an "identical tower" which is a 3rd Philharmonic 1 ($800) but the caveat to an identical center is the need for an acoustically transparent screen. Identical, vertical center speakers are very desirable in my opinion.
Philharmonic also has a matching center which isn't on the main website but could be a reasonably inexpensive option.
The Philharmonics should have a very full and accurate bass, a very detailed and accurate midrange, and an open, engaging high end, all in a neutral, pretty uncoloured package. I honestly think they're worth two to three times that price... the parts cost alone could be a good 90% of what you pay.