Too many speakers for home theater?

No..Get a processor with the Logic7 processing from Lexicon. That alogrythm will make those speakers work magic

Proper setup should alleviate your problem.

Thanks Rwwear

I like long wall placement with 7.1...di-pole on the sides and mono-pole front and rear.

Dave

"...Proper setup should alleviate your problem."

Yes, this is the "correct" answer for you!
Setup and acoustics, as well as calibration and tweeking is going to "do it" for you, yes!
You say you're getting "flat frequency response" from your listening possition???...is that from ALL SPEAKERS SEPARATELY, or as a whole???...how did you measure?...from the bass frequencies only?...did you measure the sub for the lowest, and the other speakers for freq's above what the sub was doing?..at the crossover???
Anyway, your main issue is first getting flat response, and even response from speaker to speaker! Getting speakers to have good response (no dip) at the CRITICAL CROSSOVER reigion is also paramount, and problem with most sub/sat systems!...as well as people crossing over their bigger speakers to a sub, etc...although not as frequently debauched.
Other than that, yes, the closer you sit to your speaker system (mains especially, specifically), the better your acoustical situation as a whole will be!!!! More specifically, your imaging, dynamics, detail, and soundstage will be drastically improved, if you can assure that you hear MORE OF THE DIRRECT SOUND (SIGNAL) FROM YOUR SPEAKERS THAN REFELECTED SOUND!. If you don't have anything helping your acoustics, like for reflection points, slap echo, etc, you will do INFINITELY BETTER(as will everyone) by sitting proximally closer to the speakers, yes! You're hearing more of the information, before your ears pick up the reflections, smearing the original image in "time".
All things are to be considered however, and some speakers make you sit back further, so you gotta know your speakers/slope, etc. If you can't PROPERLY adress acoustics in your setup, this is the way to get best sound...especially with your speakers. The alternative is to get very "focused/beamy" speaker arrays for the fronts! This will severly alleviate your sidewall, ceiling, floor, reflection interaction. But best is simply sitting closer.
Otherwise, you really should learn how to treat your acoustics if you want the maximum sound quality, for certain!
As for the side speakers, you really should get all these speakers higher off the ground, above your head so as to asure they're not localizeable. And also, YES, make sure each speaker is getting flat frequency response, is HUGE!! ...most don't do this, I repeat once again.
In fact, getting flat response down to the crossover point(sub to sat's) is the most critical factor IMO, then closely followed by possitioning for imaging, effectiveness, and cohession with the rest of the system/soundstage. Another strong consideration for the rears is making sure "tonality" is correct. With dirrect radiators, you will need to AIM THEM CAREFULLY FOR THE SEATING POSSITION, yes.
Anyway, if you look at what "EMI" is doing with their "acoustical kits" (diffusion/absorbtion), this will dramatically help you improve your sound if you can treat things as they do for your room size/layout!
Good luck...

Exertfluffer, you've been most hel[ful with your response. The only thing I haven't done is check the frequency response for each speaker individually. I'm aware of general setup rules and, for the most part, have a fine sounding HT. I was really asking if taking the sidewall surrounds out would add a bit more spacious sound. Even if I lift the sides off the ground more, they're still about 7-8 ft from the listening position where the back surrounds are about 10 feet and angled for more reflection.

Mt10425,

From my own personal experience, I would stay with 7.1 as I found 5.1 to be far less satisfying for surround envelopment.

If you can experiment with speaker positioning, I would suggest two things. First is to move the side speakers forward so they are 12' from the front wall, same distance as the seating. That will provide a side source. Second, I would move the rear speakers out of the corners, still along the back wall, but moving each one in about 2' - 3' from the side wall.

My other thought is to look at the processing that your PrePro provides. Since there are no 7.1 sources AFAIK, the surround processing is important. I could not find the 317 listed on the B&K web page, so I don't know what processing it offers. I concur with the above recommendation to try Logic 7, which is what I use to great effect. Alternatively, you could try DPLIIx. Both can generate 7.1 outputs from any source.

Thanks
Bruce