I am getting ready to start planning my Home Theatre room. The room is 12' x 18' and I plan to go with a 120" Projector screen with a 7.2 speaker configuration. As my room's width is only 12' across, once the screen is up there does not leave enough room to have a main speaker and subwoofer placed each side. As such the only way to make it work would be to build my false wall so my mains are located above the subwoofer on each end. My question is, will this negatively affect the accoustics of 7.2 sound? Any input would be appreciated.

Use an AT screen and thereby get your speaker locations correct. you don't want them at the room boundaries.