Ist time poster...but have been researching for a year. I have a dilema.. I originally thot I would have my upstairs games room 16x 24 as my media/music room. However I am happy to say I have both sons 21 23 at home again and they are using this room to the max ( I realized also I did not like going upstairs to listen to music or watch a movie).
Instead I have purchased a 42" Plasma for my family room (12x14) that is the back half of a bigger kitchen/familyroom (28x12). I have NO back wall as it is one big room. I'll buy my new stereo components after I hear recommendations of speaker set up.

1 Limited space on floor with couch arrangement.
2 Front speakers must be on stands
3 Rear speakers (hopefully) can be placed on the rear side walls.
4 Center speaker will have to be horizontal on a 2' high antique cabinet next to the TV
5 Sub? don't know

Am I looking in the right direction? or should I think of a much cheaper system that will provide me the same quality due to my size configurations

Hi and welcome !

Don't worry about the size of your room -- that's a typical "smaller system" room and you can get some very good sound there. Having a small portion of a larger room means that you will probably be able to get deeper and smoother bass response, but the downside is that you will probably need a slightly more powerful sub than you would if the room was really just 12x14.

How do you see yourself using the system in terms of movies vs. music, what kind of music do you listen to, how loud etc. ?

Type of music is Country, some classical and all round mix of the rest. We watch a lot of movies and sports on the TV.