Nathan, welcome. I'll comment on some of your points: 2. The receivers you mention can be considered as essentially equal as to basic power amplification. Yes, your receiver should have MultEQ, but even better, should have the more advanced MultEQ XT, which the 709 does and the 5005 doesn't. A very good buy on the 709 factory refurb(which should be at least as reliable as a brand-new unit)is available for about $530 from
Accessories4less .
3. Other factors being equal, a larger driver in a sub results in a lower bass extension and the ability to play louder, but other factors often aren't equal, and some 10" subs outperform some 12" models. In the price range you're looking at with the Lava(about $350)I'd suggest that you consider the excellent Hsu STF-2.
4. The position of the projector isn't relevant to the 5.1 vs 7.1 question. It's if you have enough room behind your listening position(say at least 4') for a rear sound-field to be formed by back surround speakers.
4b. As to the side surrounds(not "rears")in a 5.1 setup, which should be far to the sides and maybe 2' farther back than the listening position, the use of the very broad dispersion QSs is strongly suggested to give the best surround sound experience for both music and movies.
