Blob7 - Intermingled here, you've gotten some good advice on your original question. For many of the reasons given above and a few more, I have a dual-purpose system in a 14x18x8 room and am very satisfied with it's performance on both HT and 2ch. I would heartily endorse your notion of going for the Pioneer PRO-710 - if I was upgrading my TV right now, that's the line I'd go for, though I'd probably get the 610 for space considerations.
You'll never get a consensus on what to buy, but you'll get plenty of suggestions on good gear. A couple suggestions I'd give you - Lexicon is coming out with their latest high-end processor, the MC-12. They have traditionally excelled at the HT aspects of the pre/pro, and I'd expect this model to push the envelope more. It's a completely new architecture offering the same "future-proof" design characteristics (which I never believe from any manufacturer, but that's another point). For speakers, I'm a big Dynaudio fan, but they don't really have a full assortment of surrounds and their center channel is nothing special. With your budget, you could look at the Revels - they do have special center and surrounds (pricey too).
I agree with the point made that you don't need big Class A amps for that size room, nor would I recommend them, especially if they're going to be in the same room (hot!). I'd opt for a dedicated 2ch amp for the fronts that was of higher power and performance, and then a 5-channel for the centers / surrounds. Many companies offer such an assortment
And I'll throw my plug in for the value of high-end HT gear as well - movies are an art form every bit as much as music (though not having been around as long historically). To write off the reproduction of movies as nothing more than the recreation of explosions, etc. is just too simple. First off, the movie soundtrack is more prominent than ever these days - reviewers of audio gear, too, reference soundtracks more often than ever. Yes, I'm aware that it's not that "crappy" DD or DTS mix they're listening to, but the benefits the soundtrack gets from a higher-end system while playing a movie are substantial. Second, dialogue clarity is essential to getting the fullest playback of a movie. So is dynamic range, etc. etc. I would even argue that hearing a glass shatter "accurately" enhances the experience - that wasn't the case with my nice Denon reciever but most certainly is the case with my Lexicon MC-1. Is it possible to enjoy movies without this level of detail? Sure, just like it's possible to enjoy music on a boom box or mid-fi system. Just like high-end audio, it's not important to everyone, but not everyone who's into HT can be satisfied by a trip to Best Buy either. -Kirk