New HT system

I'd go with Anthem Gear (avm 20,30 or 50) with a 5 channel anthem amp. ($2500-$3500)
Speakers: your room is tight so you can't place them too far from the walls. You can not go with rear ports or def tech bipolar for that reason.
Paradigms will work. My theater is coincident all around. Find conquests or truimphs for $600/pr-$800/pr. Try canuckaudiomart too. They are extremely efficient and 100wpc will do. ($1800-$2800) I'd be happy with 805's all around too.
You don't need big towers with the REL.
Source, get new: I prefer Denon. Don't break the bank on this since the sources tend to get obsolete after 6 months. That should run you $500-$1000 unless you go nuts.

Will be using for BD movies and sports tv.

Thanks for responding. I've been at this for a while so I know a good deal about 2 channel. I already have a dedicated high end stereo room for music only. MUSIC ISN'T IMPORTANT for this endeavor. I like all types of music. I will be having a dedicated 20 amp line for the HT room as well as line conditioning. My questions are what speaker set up is best. I'd consider monitors and towers. Will most likely use one REL sub.
Room will be above dimensions. 5.1 most likely. Have owned B&W nautilus 805s in past and wondered how they might work in 5.1 setup? Knowledge on Deftech, Usher, Totem, and Paradigm appreciated.

Whats the main purpose of the dedicated HT you plan to use? Bluray movies , videogames?

Budget is a good place to start. Now we need to know what kind of music/sound you like? Do you like mellow, bright, tons of bass...
Do you want monitors or floor standing. You can do floor standing in the front and monitors in the rear. How much space do you have? Will you have space behind the speakers? If they have to go near a wall, you don't want rear ports. Do you want 5.1 or 7.1? 7.1 can get crowded.
A small room may require only 100wpc, while a huge room or really inefficient speakers may require 300wpc or more.

Do you have neighbors to piss off? Most of us can never have a big enough sub. The better the sub, the less strain on the rest of your speakers and amp.

I love Anthem and Sunfire gear but even they have big differences such as 100wpc vs 400 wpc and hdmi or not when buying used. Some people have space constraints and buy high powered tiny sub/s. Some people have so much room that they buy a pair of 500 watt REL subs...

Get the picture so far? Need more data...

Finally, if I had it to do over again, I would have scrapped my projector and bought a 50 or 56 inch plasma. the picture may be a little smaller but has a life of much more than 1000 hours, doesn't need a cooling fan and works well with all the lights on.

Don't forget at least a couple hundred for a line conditioner or surge protector to take care of your $10k investment.

I'm talking speakers, amp and processor or receiver, and all cables. $7500 gets used really quick for a decent system.

If I had a $7500.00 budget,I'd buy something new with a warranty.That's a lot of money(to me anyway)to fork out for something that may crap out tomorrow with no recourse.$7500.00 will buy you a great audio section for a HT system.This of course is just my opinion.Good luck with your project.