Audiofile HT system for $10K

Oops....as for video gear and such, room conditions and viewing habbits might be helpful for you to fill in. If you are indeed going with a projector, there are issues to weigh here as well.
I personally like the idea of "larger immage" for full cinema impact and involvment! DLP's, LCD's, DILA's, even plasmas and CRT projectors keep getting better and cheaper, and it's becoming more practical all the time to "go big"!
If your priority is sound first, and you still want a larger image however, might I suggest looking into one of the newer LCD or DLP offerings in the $1500-2000 new range! (I might recommend other if you'd not said "sound is your main concern").
Infocus makes the X1 DLP for around $1000 street price that is very good for that price point, and will give you a nice picture out to at least 65-70" diagonal! There are some others in the DLP and LCD market to consider at that price range, and you might be very pleased at what they offer for so little for a HT experience in a darkened room!(if you have one).
You might consider going to www.avsforum.com and doing some searching on what people are saying about these "budget projectors". IN short, the black level and perfection of color isn't what better CRT projectors offer, but they offer a lot of value and enjoyment for cheap! ..and you can get a pretty darn adequate image if you know what you're doing.
That is my main issue with DLP's and LCD's, is black level compared to CRT's. If you watch a really dark seen on one of these, it just can't do black so well! Black is, well, gray! A used CRT projector with low hours might be a good chioce if you want a large screen image. Otherwise, if non of that floats your boat, you might just stick with a new Toshiba(or similar) rear projetion CRT TV! The've got that technology down to perfection basically..it's a consideration. Still for $1k new, the DLP's and LCD's are tempting!..getting cheaper all the time.
Hope this helps

Well you indeed pose a pertinent question by asking "what's the best way...?"
You basically can either pack all the quality gear you can into that budget, or you can pay someone to build you a system for that same money. You obviously have a lot of chioces. And which ones you ultimately chose, and the path you take will dictate your results obviously.
The one many people take, dissapointingly, is simply to buy what they think is the best gear they can fit in that budget. My extensive experience suggest that that route most NEVER ends up yielding the best possible results however! It is all too easy to do it WRONG!...and there are TONS OF VARIABLES to consider in making a system yield top caliber restults!...lots! While there is a large amount of potentially good gear(tools) to chose from that might fit your needs, it is worth remembering that the gear is only 40-50% of the equation! The other 50-60% is acoustics, system layout, speaker and seating placement, calibration, tweeking, knowledge, experience, and the skill of the person behind putting it all together!! Whether it be the audio or the video system, the stuff just doesn't perform well without proper execution! If you doubt, you can EASILY go through the past articles writen by all the competent audio magazine writers out there, and listen to what they write regarding equipment vs. the issues I've discussed. If you do a search on acoustics, room set up, speaker placement, calibration, etc, you'll see.
My suggestion to anyone wishing the absolute best results, or often even at least excellent results, is to let a skilled and experienced professional put the system together for them! (there's no replacment for experience and dedication)
Case in point...based on what I mentioned above, and the validity of those statments being indeed concrete, tried, and true, someone who knows what they're doing will be able to get you much better end results, with potentially less expensive gear that works well together, in your room, for your needs. You'll have to pay em for their services in cluded in your budget. But still, the restults are going to be better sound and picture, and overall experience if they know what they're doing.
I've gone to FAR too many audio/video enthusiest's, even audiophile's homes, and experienced what they had going. Those experiences keep reinforcing the fact to me that you have to know what you're doing to get all this stuff right!..it's just too involving, exacting, and difficult for someone who's inexperienced to possibly know what is possible, and what needs to be done. You don't know what you don't know after all. That, and the gear selection and system matching is most always not put tegther intuitively enough without experience as well.
You can easily take someone with $10k worth of highly rated gear, and let em put a system together. Then, they can pay someone like myself $10k to put a system together for them, and the results are ASSUREDLY going to be light years better with what I end up with for them, simply because I know what I'm doing!
When you do 1000 or more systems over the years, you tend to learn stuff...stuff that the average enthusiest couldn't possibly grasp by reading some articles, and buying some gear on his own.
So, in truth, you could do some reasearch, and take your best shot at it(many do..and the results are what they are). And that approach has its rewards. I find the rewards are ultimately much more rewarding by simply GETTING IT RIGHT in the first place.
Unless you're spending you life in persuit of audio/video excellence on your own, someone who's "been there, and done that"(for many many years) is going to get you best results...that's just the way it is.
However, should you decide you want to do all this yourself, there are a lot of variables you need to deal with to chose the best gear for your set up/room. For instance, is the room small?..medium?..other? What are the acoustics like in the room? (floors, ceiling tecture and height, wall and furniture situations, etc) What kind of music do you listen to most? Do you sit infront of your speakers when listening, or do you move around the house more? Also, how is your seating and speaker placment flexibility? Are you into "simple"? Or can you deal with a level of more essoteric rather than utilitarian gear/system chioces?
These, among many other things, have a lot to do with which gear is going to be the best chioce!
Fill in the blanks a bit more, and we can suggest some toys to play with.

Start with a RPTV at around $2,000. Have 3 20 amp circuts installed to run it all off of, you should be able to find one of many great pre/pros right here on audiogon used for $1,500/$2,000. You should also be able to pick up a good multichannel amp here on audiogon for $1,500/$2,500, cost will depend on room size and speakers used in your system. You can find 5 speakers and a sub that will more than do the job for around $2,500, this should leave you enough for a F.T. audio passive pre for two channel and a good Dvd player of your choice. I would not worry about cables of very high quality until you get set up and are ready to fine tune. I can not offer better advice as to brand models with out more info on your tastes and planned room.