I agree with Ray. I'd suggest M60s and an upgraded sub.
Offloading bass to the sub greatly frees up the amp. Most power is required for bass frequencies. With the sub handling bass (and most of the power), I personally don't think you need an upgraded amp.
Save some money in case you need acoustic wall panels, carpet, paint, sconce lights, light dimmers, media storage, etc. Those are the details that transform a room to a theater.
Do your seating calculations carefully. For high def, you need to sit closer than standard def for a given screen size. Here's a viewing distance calculator:
Viewing distance calculator
Be aware of how much off-axis angle your screen tolerates. If you can't control room lighting a big DLP or LCD rear projection display might be better.
The biggest improvment I ever made to my HDTV was getting a DirecTV HD Tivo (HR10-250). It totally transforms the TV experience.
If after considering the above you have money left over spend it on seating. You spend a lot of time there.
