1) Not at all. Could you buy less speaker, sure. Will the M60s sound better than their bookshelf counterparts, I believe so. I have M80s in a room that is 14x20 (so not much bigger), and I've never said or even thought to myself, "geeze, I should have bought smaller speakers."
I don't think you will either.
2) 2 vs. 1 sub: 2 subwoofers in one room means that you'll have more even response throughout the room. (i.e. not as many big dips in volume at certain frequencies, or big peaks at other frequencies) With two subs, you'll be able to achieve slightly higher volumes than with one alone. Cons: 2 are more expensive than 1, and the 350 won't play quite as low/loud as the 500.
I can't personally make a recommendation between the two as I haven't heard the new 350s, but I can tell you that people rave about them here all the time. I have however heard the 500 in person in a room about the size you are describing and it is a fantastic speaker. I didn't feel it was lacking at all, so don't think for a moment you wouldn't be happy with "only" one 500 in your room. If you allow yourself some flexibility as to where the subwoofer can be placed, you should be able to
experiment to find the best location when you get it and locate it where it provides the best response for your primary listening position.
The other thing to think about with one sub versus two in a room your size is whether you will have the floor space to accommodate an extra subwoofer. If space is at a premium, you may want to save the space for extra seating room versus another subwoofer.
3) 14 gauge wire should be fine assuming you're locating your equipment rack somewhere within the 20x10 room (or very close to it). Most of us here love Monoprice for quality/price ratio. Don't be fooled by the Monster cable marketing hype. Save money on cable and reapply it elsewhere where it will make more of a difference. If you want to allow for maximum future flexibility, drill the holes through your studs 2-3x bigger than the diameter of your speaker wire and run a length of twine from your rack area to each speaker as well. This will serve as a "pull cord" for any wires you need to run through to those locations in the future (i.e. you tie the twine to the end of the wire you need to run to the speaker and then pull it through from the other end - this should save you from ripping up walls in the future).
If you're wiring for a projector, run a length of corrugated tubing from your equipment rack through the walls/ceiling to the projector location so that wires are protected and pull through more easily. Add a pull cord through the tubing as well for the same reasons.
4) It's hard to effectively block the bass from the HT going out, but good quality high density insulation should prevent some furnace noises from coming in. There are some specialty products that have been discussed here in the past - I'll let others who remember them better comment.
5) Enjoy the project! Lots of work, but oh so worth it in the end!
Jason
