Media Room, Theater Room, Family Room
The first step is to decide where you want to put your Theater. Will you have a dedicated home theater room or will your system be in a multi-purpose media room? Or will it be in a Family Room? Either way can be fantastic. A dedicated home theater is designed specifically for entertainment: enjoying movies, sports, TV, and video gaming. Basements, attics, bonus rooms, or spare rooms are great as dedicated home theater spaces. A media room serves for more than entertaining. A family room or bonus room usually doubles as a media room as well.
The next steps are deciding both the location and size for your video display. Both the Society of Motion Picture and Television Engineers (SMPTE) and THX Ltd. (a developer of quality standards founded by Lucasfilm) have recommendations on this subject. This step is very important. Going too small will be disappointing and not give you that Theater experience. Going too big may be overwhelming. We can help you decide what is the best choice.
Acoustics and Soundproofing
It's important to have a great picture, but a movie without good sound is a terrible experience. You must be able to clearly understand dialogue. Great sound immerses you in a film's sound effects. All things being equal, acoustic treatments (these can be carefully done, normal room furnishings) have a larger impact on the sound than almost any component. Another thing to consider is soundproofing. Will late night viewing disturb others? Should you do something about it?