First let me say this forum has been a great resource so far, lots of great people here.

Here's my specific layout: http://aycu07.webshots.com/image/20206/2004145481071216670_rs.jpg
The red boxes are speakers, the screen will be along the wall with the four red boxes (fronts, center, sub).

I'm doing a projector and probably 92" screen, and you can see the seating area is going to be about 12-13' from the screen, though I could probably go closer.

For the front speakers I like the Architectural series of speakers. For those a few questions: is it ok to place the fronts below the screen along with the centre? I have a small corner fireplace on one end of that wall and will have to have some furniture on the other end to hold the components and balance the wall a bit, and with a 92" screen that doesn't leave much room for the speakers (the wife doesn't like floor standing speakers).

For the surrounds, I'm not sure exactly where to place them. It's going to be just a 5.1 system. From the picture, if I put them on the available walls (Position 1), they'll end up a bit forward of the seating area.. Is this a huge issue? Can I mitigate that by using the QS8's?

If I go ceiling mounted I can go with position 2 or position 3.. there's a dropped bulkhead all around the ceiling and I'm concerned that if I use position 2 the speakers will hang low enough to look stupid.

If I go with position 3, would the QS8's still be advisable or would a directional speaker be better?

Also, I'm not sure what sub would be appropriate.

Thanks in advance.