What are the limits of room correction/ treatments ?

You can never under estimate the value of treatment to room...just going through it myself...been having to adjust (only) the bass traps...1" or 2 either way make a huge difference in sound stage and balance...

as others mention well place speakers are crucial...just part of equation that can be frustrating as hell...but so worth it when achieved...never going to be perfect but its a effort that pays off in enjoyment.

This stuff gets kind of tricky but I would recommend the following:

1)  Get your speakers set up to spot where they sound decent including toe in and tilt (front to back)

2)  Add bass traps in the corners

3)  If your room has hardwood floors you will need to put a large area rug in front of the speakers or treat the ceiling

4)  Treat the first reflection points on the walls to the sides of the speakers

5)  I would add absorptive panels or material cautiously.  You can get too much and it makes the room too dead

6)  I have had good success with adding diffusers instead of absorptive panels.  They work great on the back wall behind the listening chair and also on the front wall behind the speakers.  I don't like the cheap foam variety of diffusers and have made mine out of wood. 

There a lot of good sites for information that will do design work if you buy their products.  In my opinion they can go overboard on the absorptive panels since they are also in the sales game.  Just my two cents.